Merchant services and merchant accounts

Find a way to process card payments that will work for your business by comparing EFTPOS terminals, business bank accounts and e-commerce platforms.

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Just like there are a number of different types of credit cards, there are also a number of different ways to accept card payments in your business. The right way for your business to accept card payments will depend on a few different factors. This includes whether you operate an online store or a bricks-and-mortar store (or both), whether you need a portable payment solution or a fixed terminal and what cards and types of payments you want to be able to accept.

This guide will take you through the types of merchant services that are available, how to decide what your business might need, what fees and restrictions there are and how to compare to find the right one for you.

What are merchant services?

Merchant services are financial services and products offered by banks specifically for businesses. While the category can be broad, it typically refers to payment terminals and software used to accept and process card payments.

EFTPOS payment terminals

These are physical payment terminals that accept card payments in stores, such as cafes or retail shops. You can get an EFTPOS terminal that's fixed to your counter top or one that you can move around the store (or both).

Some EFTPOS terminal providers also offer mobile payment solutions. This is a solution to suit businesses that don't have a stationary point-of-sale (POS) set-up or that are on the road, such as tradies. Integrated payment solutions are payment terminals that tend to be larger and integrate directly into a store's existing point of sale (POS) system.

Business bank accounts

You might not need an EFTPOS terminal or POS payment system, and you may not need to accept online payments. If you'd prefer to simply invoice clients and be paid straight into a bank account, a business bank account might be the right choice for your business.

Name Product Card access ATM Withdrawal Fee Fee Free Deposit p.m. Monthly account fee
Commonwealth Bank Business Transaction Account ($0 Monthly Account Fee Option)
Visa
$0
$0
$0
An everyday business transaction account with a no monthly account fee option and a linked Business Visa Debit card to help you manage your expenses. Make unlimited electronic transactions for free and receive customised alerts regarding your balances. Flexibility to switch to the $10 monthly account fee option and get 20 assisted transactions per month.
NAB Business Everyday Account ($0 Monthly Fee Option)
Visa
$0
$0
$0
$0 monthly account-keeping fee.
Unlimited standard electronic transactions.
Sign up for a NAB Business Transaction Account and enjoy free digital transactions, no monthly fees, and a linked NAB Visa Debit card at no cost.

Commonwealth Bank Business Transaction Account ($10 Monthly Fee Option)
Visa
$0
$0
$10
You'll get 20 free assisted transactions (normally $3 per transaction) per month for one $10 monthly account fee. Make unlimited free electronic transactions. Switch to the $0 monthly account fee option at any time.
Westpac Business One Account - Low Plan
Mastercard
$0
$0
$10
Unlimited free electronic transactions, 25 free staff-assisted and cheque transactions every month and a linked Business Debit Mastercard.
Westpac Business One Account - High Plan
Mastercard
$0
$0
$20
An account designed to handle all of your large volume business transaction needs.
NAB Business Everyday Account ($10 Monthly Fee Option)
Visa
$0
$0
$10
Make unlimited online and staff-assisted transactions for one flat monthly fee.
Enjoy dedicated support from NAB Business bankers available seven days a week.
St.George Business Cheque Account Plus
Visa
$0
$0
$20
This account is ideal for businesses that make a large number of transactions. Pay one $20 monthly account fee and make up to 70 in-branch transactions for free per month.
ANZ Business Advantage
Visa
$0
$10
A convenient everyday transaction account with one monthly fee. You can opt for a free linked ANZ Business Visa Debit card with this account.
ANZ Business Extra
Visa
$0
$22
Enjoy access to ANZ Internet Banking for Business, plus ANZ’s optional Business Overdraft facility, which can be attached to the ANZ Business Extra at your request.
NAB Business Interest Account ($10 Monthly Fee)
Visa
$0
$0
$10
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Online payment solutions

For businesses that operate online or need to be able to accept online card payments, there are also online solutions. These include apps and payment gateways as well as fully integrated business webstores.

E-commerce platforms

For businesses that operate online or need to accept online card payments, specialised online solutions can include apps and payment gateways. Many e-commerce companies help build an online store from the ground up. You can compare e-commerce platforms in the table below.

Name Product Starting price Hosting
Website builder, Shipping software
$12/mo
Hosted, Self-hosted
Payment processing, Website builder, Inventory tracking, Shopping cart software, Shipping software
$29/mo
Hosted
Payment processing, Website builder, Inventory tracking, Shopping cart software, Shipping software
$29.95/mo
Hosted
Payment processing, Website builder, Inventory tracking, Shopping cart software, Shipping software
$0/mo + processing fees of 2.2%
Hosted
Website builder, Inventory tracking, Shopping cart software, Shipping software
$19/mo
Hosted
X-cart
X-cart
Website builder, Shopping cart software, Shipping software
$0
Self-hosted
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How do I decide what type of payment terminal my business needs?

To decide what type of card payment terminal to get, keep the following points in mind:

  • How do you need to accept card payments? The type of payment terminal/s you need depends on whether you accept card payments online, in-store or in a number of different locations. Some payment terminals can only operate in a fixed location, so they suit businesses that have fixed POS locations. If your business requires a portable payment solution or you just think this would be a convenient option to have, consider a terminal that links to a mobile phone or one that is portable and still links to your POS system. Online payment systems are different from physical payment systems and can include apps or full online store set-ups.
  • Do you have a POS system it needs to integrate to? If you don't have an existing POS system or your business is a smaller operation, you may not need a payment terminal that integrates with a POS system. However, if you'd like a terminal that does do this, there are a number of options available. The benefit of this set-up is that it is a more automated system and allows for faster payment processing, easier reconciliation and fewer errors with transaction accuracy.
  • If you don't have an existing POS system, do you want it to link to a mobile app? If you have a small operation or are just starting out with your business, it's important to decide how much of a set-up you want to invest in. A POS system can reduce your admin time and increase the accuracy of your accounting, but the cost is higher. Payment terminals do not require you to have a POS system to operate, you can link certain terminals to your phone and download an app to manage payments. You just need to decide what will work best for your business.
  • Do you have an existing business bank account? Whether you have a business bank account as well as the bank the account is with will influence your decision regarding which bank to consider for your merchant services. Some banks require you to open an account with them to use all of the features of their merchant services while others do not, so check what restrictions apply.

How do I compare the features of payment terminals?

Payment terminals can come with a number of features that can make running your business easier and accepting payments more convenient. Here are some features to look out for and to compare when considering what merchant services are right for you:

  • Portable payment terminals. Not all payment terminals need to be stationary; many terminals allow you to carry them around the store with you or take them anywhere there is an Internet connection to process payments. Consider if this will be useful for your business.
  • Connect to a smartphone. Some payment terminals can connect to your smartphone, doing away with the need for a full POS set-up. These terminals usually come with apps to make processing and managing payments simple.
  • Payment options. Depending on the payment options you want to accept, terminals can be contactless-enabled and can accept Visa, Mastercard, American Express, Union Pay and Diners Club.
  • Insights and analysis. Features for insights and analysis into business performance vary between providers, so see what is available when you are comparing terminals.
  • Settlement time. Check if the bank offers instant settlement for card payments, which means the transaction will show up as soon as it has been processed.
  • Email receipts. Many plans have the option to email customer receipts rather than giving printed receipts to customers.

How much will I pay for merchant services?

The fees you will be charged differ depending on the bank or merchant services provider. Any of the following fees may apply:

  • Total monthly cost. If you are quoted a monthly cost for a merchant services plan, the plan will generally have a cap on the card turnover that you can process per month. If you need to process over this amount, you will be charged a fee as a percentage of every purchase over the cap.
  • Credit card authorisation fees. These are fees charged when you check whether there are funds available on a card before a transaction is processed.
  • Credit card service merchant fee. This fee may be charged by the bank when you process a Visa or Mastercard credit card and is generally expressed as a percentage. Some retailers choose to pass this fee onto their customers, but you are restricted as to how much you can charge.
  • Payment terminal and account fees. You may be charged fees for administering your account, installing your payment terminal or establishing your account. Establishment fees, cancellation fees and equipment fees may also apply.
  • Chargeback fees. You'll be charged a fee if the cardholder disputes a credit card transaction.
  • Terminal access fee. This is a fee the bank may charge you for providing and maintaining your payment terminal.
  • Debit card fees. You may be charged fees for processing debit purchase transactions or for a customer getting cash out at an EFTPOS terminal.

How do you apply for and set up a payment terminal?

The application and set-up will differ greatly between providers and will also depend on the size of your business and the type of payment terminals you choose. For example, if you select a payment terminal that just requires an app to operate or can be set up with your existing POS system, you simply need to apply online for your chosen solution and have the terminal delivered to your business address. Instructions for the payment solution will be included and you will be guided through the set-up when you download the app.

If you have a large business, need a custom solution or have a complicated set-up, someone may assist you with the set-up for your business. Find out about the set-up process before you apply so you are comfortable with it for your business. It's also a good idea to see what customer support services are offered from the bank in case technical issues arise to avoid it affecting your business.

What is a merchant account?

Merchant accounts allow businesses to accept debit and credit card payments. When a customer makes a payment, the funds are directed through the business' merchant account. But you don't access funds there — money is transferred to your business checking account in one to two days.

Think of it as an intermediary between your customers' payment and when you get paid. Businesses pay for these services, with fees that depend on the provider and plan you choose.

Merchant accounts vs. payment service providers

Like merchant accounts, payment service providers (PSP) allow businesses to accept customer credit and debit card payments. But there are several differences that separate these services.

While traditional acquiring banks assign each business its own merchant account, PSPs like PayPal, Square and Stripe group all businesses in its service under a single umbrella account. And unlike traditional merchant accounts, PSPs seek to offer a one-stop-shop for processing services.

Merchant accountsPayment service providers
What size business is it best for?Medium to large businessesSmall businesses with a limited budget
Pricing structureTiered, interchange-plus or subscriptionFlat-rate per transaction
Setup timeUp to a weekSame day
ReliabilityThorough underwriting reduces risk of account freezesLarge transactions could initiate an account hold
Contract required?SometimesNo
Features and servicesPayment processing, dedicated account managerPayment processing, hardware, payment gateway, add-on reporting and invoicing tools

How to choose the right merchant account

Here's how to narrow down the competition to select a merchant account provider:

  • Pricing structure. The way you choose to pay fees for the merchant account depends on the size of your business and how many transactions you process. Consider a pricing structure that offers long-term savings.
  • Contract length. Some providers require contracts for up to three years. Be wary of multiple-year contracts and automatic renewal clauses.
  • Fees. Transaction fees are standard, but be on the lookout for early termination fees and liquidated damages that come when you switch providers.
  • Reputation. Before you apply, investigate your provider's online reputation with sites such as Trustpilot. Browse customer feedback and look for red flags that indicate potential issues down the road.
  • Support. Will your account manager be available to troubleshoot on weekends? Ask your provider what to expect in terms of ongoing support once you've signed up.

How much does a merchant account cost?

Merchant accounts come with transaction fees for each credit or debit card purchase. Expect other common fees including:

  • Setup fee. You could pay a one-time charge for your account to be set up.
  • Monthly fee. Monthly account service fees range from $10 to $99 monthly, while annual fees tend to top out at $300 annually.
  • Chargeback fees. This is a fee which is charged by a bank when a cardholder disputes a credit card transaction.
  • Cross-border fee. Accepting payments from customers outside Australia results in a cross-border fee typically ranging from 0.05% to 1.5% of the transaction.

How to sign up for a merchant account

Once you've selected a provider, it's time to get the application process rolling:

  1. Put together a business profile. Establishes credibility to a provider and should include transaction volume, average ticket price and how you plan to accept payments.
  2. Apply. While taking into account application fees, don't be afraid to apply to multiple providers. You'll have more wiggle opportunity to snag a competitive rate.
  3. Negotiate. The processing fees are often negotiable, so compare your options and be up front about what you're looking for.
  4. Set up. Once you've established a rate you're comfortable with, your provider schedules a date and time to set up your card processing terminals. If running an online business, ask your provider about any plug-ins you need to install to accept payments.

Questions business owners have asked about merchant services and payment terminals

Do I need to open a business bank account to sign up for merchant services?

Some banks require you to open a business bank account to be able to use all of the features of its merchant services, but not all banks do this. If you have an existing bank that you want to stay with, you may want to check if they offer merchant services or find a merchant services provider that will let you stay with your current bank account.

Do I have to sign a minimum period contract to get a payment terminal?

Some banks may require this, but many have options with no-lock-in contracts.

If I get a payment terminal without a POS option, can I still accept cash payments?

Some merchant services' apps have options that let you enter cash transactions, so check if this feature is available with the bank you are considering.

What happens if I don't know how many card transactions I will be processing each month?

Not all plans are structured with a cap limit on transactions. Find a merchant services provider that has no transaction limit or one that will let you move to a plan with a higher transaction limit if you find the cap is not high enough.

Can I customise my receipts?

Most merchant services providers let you customise your receipts by adding your business logo at the top, but the information on the receipt and the layout will be a standard format.

Can I pass on the cost of processing cards to my customers?

Yes, but you cannot charge customers more than what it costs you to process card payments. You can find out more information in our guide.

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