5 Ways to Reduce Your Payment Processing Costs

Payment processing fees are one of those costs that many Australian business owners accept as unavoidable. But they don't have to be. Here are five proven strategies to reduce what you're paying on every card transaction.

1. Negotiate With Your Current Provider

Most merchants never negotiate their processing rates. If you've been with your provider for a while and have consistent transaction volume, you likely have leverage. Call your provider and ask for a rate review. Even a 0.1% reduction can save thousands annually.

2. Consider Surcharging

Under Australian Consumer Law, merchants are permitted to pass on the cost of card payments to customers, as long as the surcharge doesn't exceed the actual cost of acceptance. Many businesses now apply a small surcharge of 0.5–1.5% on card transactions. While some customers prefer cash-free convenience and accept the fee, others may opt for alternative payment methods.

3. Review Your Terminal Costs

Terminal rental fees of $30–$80 per month add up. Some providers offer free terminals or allow you to purchase your own. NewPay, for instance, provides free Verifone terminals to all merchants as part of their ad-subsidised model.

4. Switch to an Ad-Subsidised Processor

This is the biggest opportunity most merchants overlook. Platforms like NewPay use advertising revenue to subsidise your processing fees, cutting them from the typical 1–1.5% down to just 0.55%. Sponsored brand ads display on your payment terminal, and the savings go straight to your bottom line.

5. Optimise Your Transaction Mix

Encourage customers to use lower-cost payment methods where possible. EFTPOS transactions typically cost less to process than credit cards. Consider whether you need to accept American Express, which usually carries higher fees.

The Bottom Line

For a business processing $50,000 per month in card payments, even small rate reductions add up fast. At a typical 1.2% rate, you're paying $7,200 per year. At 0.55% with NewPay, that drops to $3,300 — a saving of $3,900 annually.