Five questions to ask your payment service provider
Payments are one of the most critical parts of running a business, but can often be one of the least revisited.
Once terminals are installed and payments are flowing, it’s easy to assume everything is set up the right way. But as payment methods, costs and systems evolve, many businesses don’t always have visibility into whether their payments setup is still working in their best interests and delivering the best financial outcomes.
Here are five practical questions every business should consider raising with their bank or payment service provider, and why the answer matters.
- How are my payment costs structured?
Understanding how you’re charged is the foundation for managing payment costs effectively.
Ask your payment service provider to explain:
- How your transaction fees are structured, particularly for debit payments
- Whether debit and credit fees are bundled together (i.e. a ‘flat fee’ regardless of the payment method used)
- Whether Merchant Choice Routing (MCR) – also known as Least-cost Routing (LCR) – is switched on for your business
Why it matters:
Some payment service providers default the processing of debit card transactions to international card networks, even when a domestic option like eftpos may be available at a lower cost. Without clear visibility into your fee structure, it’s difficult to know whether you’re paying more than necessary.
Clarity may translate directly into savings.
- Am I set up for Merchant Choice Routing?
MCR allows eligible contactless debit card payments to be automatically routed via your preferred network, typically the lowest-cost option available.
When discussing MCR with your banking partner or payment service provider, it’s worth going beyond a simple yes or no.
Ask your provider:
- Whether MCR is supported and switched on for your terminals or online store
- Whether it’s switched on by default, or requires a configuration change
- Whether your current pricing structure supports savings from MCR, and how this is broken out
- Whether they can walk through a realistic transaction scenario to show how routing choices affect your costs.
Why it matters:
Many modern terminals and ecommerce solutions already support MCR, but it isn’t always switched on automatically, and not all pricing models make the impact immediately visible. If it’s not switched on, you may be missing out on a simple way to reduce ongoing transaction costs, without changing the customer experience at checkout.
Customers still tap, pay and go. The difference sits behind the scenes.
- How resilient is my payment setup if one network or system experiences an outage?
No payment system is immune to disruption. Asking about resilience helps ensure you can continue trading if something goes wrong.
Ask your provider:
- What contingency is built into your payment setup
- Whether domestic fallback options, such as eftpos, are part of the mix
Why it matters:
Having access to eftpos, Australia’s local debit card network, can help ensure you’re still able to accept payments if another network experiences issues, reducing the risk of lost sales and operational disruption.
- Will my payments setup keep pace with how Australian consumers actually pay?
Consumer payment preferences in Australia continue to evolve, with increasing use of contactless, mobile wallets and digital payment methods – across in-store, online and on the go channels.
Ask your provider:
- Whether your setup supports a range of payment options, including domestic options like eftpos debit cards, across all your sales channels
- How they ensure new payment capabilities are introduced without disrupting checkout or increasing costs
Why it matters:
A payments setup designed for the Australian market helps ensure smoother checkout experiences today, while positioning your business to adapt as consumer behaviour continues to evolve.
- Where are decisions about my payments made, and who are they made for?
Behind every payment transaction are decisions about system rules, priorities, upgrades, and risk management.
Ask your provider:
- Where key payment systems are governed and operated
- Whether decision-making is local or offshore
- How Australian market needs and regulations are factored into those decisions
Why it matters:
Where decisions are made influences how quickly issues are addressed, how well local regulations and market conditions are understood, and whether business needs are prioritised when changes occur. Systems governed and operated in Australia and designed for Australian conditions can translate into clearer accountability and better alignment with local business needs.
Making payments work for you
Payments don’t need to be complicated, but they shouldn’t be a black box either.
Taking the time to ask a few questions can help ensure your payments setup continues to support your business – not just today, but as customer behaviour and the payments landscape evolve.
A short conversation now can make a meaningful difference over time.
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