Payments glossary
Plain-English definitions of the terms that decide what you pay. No marketing language.
- Acquirer
- The bank or institution that processes card payments on a merchant’s behalf and settles the funds into their account.
- Card-present / card-not-present
- Whether the card was physically presented at a terminal (CP) or not — online, phone, invoice or recurring (CNP). CNP generally costs the merchant more.
- Dual-network debit card
- A debit card carrying both eftpos and a scheme (Visa or Mastercard). Because it can travel down either network, it is the card least cost routing applies to.
- eftpos
- The Australian domestic debit network. Usually, though not always, the cheaper option for a merchant on a debit transaction.
- Interchange
- The fee paid by the acquirer to the card issuer on each transaction. Capped by the RBA, and the largest single wholesale input into a merchant rate.
- Interchange-plus
- A pricing model where the merchant is charged actual interchange plus a disclosed margin, rather than one blended rate.
- ISO
- Independent Sales Organisation — a business that sells and services merchant facilities on behalf of an acquirer.
- Least cost routing (LCR)
- Sending an eligible dual-network debit transaction down whichever network is cheaper for the merchant. Also called merchant choice routing.
- Merchant service fee (MSF)
- The headline rate a merchant pays to accept a card payment, covering interchange, scheme fees and the provider’s costs and margin.
- PayFac
- Payment facilitator — an entity that onboards sub-merchants under its own master merchant account.
- Payment gateway
- The service that authorises an online payment. Whether it supports routing decides whether LCR online is even possible for a merchant.
- Scheme fees
- Fees charged by Visa, Mastercard or eftpos for use of their network, separate from interchange.
- Scheme tokenisation
- Storing a card token with the scheme rather than the gateway, which can move transactions into lower-cost interchange categories.
- Surcharging
- Passing the cost of card acceptance to the customer. Being restricted under the RBA’s 2026 reforms.
- Terminal
- The physical EFTPOS device. May be bought, rented, or bundled into the transaction rate.