Australian Payments Plus (AP+) has announced a 22% drop in wholesale fees for the domestic eftpos network which took effect on 1 May, a move designed to lower the wholesale cost of payments. 

Issuer scheme fees were lowered by 22%, while acquirer scheme fees were simplified to a single rate to make it easier to see how much is paid per transaction.ⁱ  

These updates follow an earlier reduction in the interchange rates for eligible small business merchants in December 2024. With the exception of these fee reductions, eftpos scheme and interchange fees have not changed since February 2022. 

These scheme fee reductions reinforce eftpos’ position as one of the most cost-effective card payment options available in the Australian market.  

“Lowering the cost of payments in Australia is a fundamental part of the AP+ purpose, and this latest fee reduction reflects that ongoing commitment. It’s all part of having a strong and competitive domestic payment system that serves the needs of businesses and consumers in Australia,” said Adrian Lovney, Chief Payments & Schemes Officer at AP+. 

Reduced fee to drive competition 

Importantly, the fee reduction makes it more attractive to route transactions via eftpos, particularly where least-cost routing (LCR) is enabled.  

“As cash usage declines, businesses are increasingly reliant on card networks. Yet many remain unaware of the savings possible through LCR, which enables merchants to automatically route debit card transactions via the most cost-effective network,” said Lovney.  

Most debit cards in Australia are dual-network cards, which allow payments to be processed either via the domestic eftpos network or an international card network, with each charging its own fees. With LCR switched on, payments are automatically routed to the most cost-effective network.  

According to an RBA report from April 2024, the cost of accepting debit card transactions is nearly 20% lower for merchants that have LCR turned on compared with those with LCR turned off. The report also found that eftpos is cheaper on average than international card schemes at all merchant sizes. 

LCR is already enabled for 70% of transactions using physical cards. AP+ also started rolling out to mobile wallets in 2024, with LCR now switched on for around 30% of Apple and Google wallets. 

In addition to contributing to a lower cost of payments, LCR can also incentivise other card networks to lower their fees to remain competitive and defend market share. 

“Today’s change is about giving better value while helping to create a fairer, more competitive payments environment,” said Lovney. “We’re also continuing to invest in digital innovation to ensure eftpos remains a modern, secure and efficient option for everyday transactions.”