Electronic Funds Transfer at Point of Sale (EFTPOS) processing is essential for modern businesses, but understanding the true cost can be challenging. Two common pricing models—Blended and Interchange++—significantly impact your bottom line. This article breaks down how to calculate your total EFTPOS costs under each model.

Blended Pricing Explained

Blended pricing combines all payment processing fees into a single rate, regardless of card type or transaction details. This simplified approach makes budgeting predictable but often conceals the true costs.

Calculating Total Cost with Blended Pricing

To determine your total EFTPOS cost under a blended model:

1. Identify your flat rate percentage (e.g., 2.5%)
2. Multiply this rate by your monthly transaction volume
3. Add any monthly or annual fixed fees
4. Add any per-transaction flat fees

Example calculation:

• Monthly transaction volume: $50,000
• Blended rate: 2.5%
• Monthly terminal fee: $30
• Per-transaction fee: $0.10
• Average transactions per month: 1,000

Total monthly cost = ($50,000 × 0.025) + $30 + ($0.10 × 1,000) = $1,250 + $30 + $100 = $1,380

Interchange++ Pricing Explained

Interchange++ (Interchange Plus Plus) separates fees into three components:

• Interchange fee (paid to the card-issuing bank)
• Scheme fee (paid to card networks like Visa or Mastercard)
• Acquirer markup (your payment processor’s fee)

This transparent approach often results in lower overall costs but requires more calculation.

Calculating Total Cost with Interchange++

To determine your total EFTPOS cost under Interchange++:

1. Calculate interchange fees based on card types and transaction categories
2. Add applicable scheme fees
3. Add your processor’s markup percentage and per-transaction fee
4. Include any terminal or account fees

Example calculation:

• Monthly transaction volume: $50,000
• Average interchange rate: 1.2% (varies by card type)
• Average scheme fee: 0.15%
• Processor markup: 0.5% + $0.10 per transaction
• Monthly terminal fee: $30
• Average transactions per month: 1,000

Total monthly cost = ($50,000 × 0.012) + ($50,000 × 0.0015) + ($50,000 × 0.005) + ($0.10 × 1,000) + $30 = $600 + $75 + $250 + $100 + $30 = $1,055

Comparing the Models

The key differences between these pricing models:

1. Transparency: Interchange++ shows exactly what you’re paying and to whom.
2. Cost-effectiveness: For most merchants, especially those with higher volumes, Interchange++ typically results in 15-30% savings compared to blended pricing.
3. Complexity: Blended is simpler to understand and predict, while Interchange++ requires more detailed analysis.
4. Card mix impact: With Interchange++, your specific mix of card types (premium, corporate, debit, etc.) significantly affects your total cost.

How to Determine Your True EFTPOS Costs

To accurately assess your total EFTPOS expenses:

1. Request a detailed breakdown of your current processing fees
2. Calculate your effective rate (total fees ÷ total transaction volume)
3. Ask your provider for sample calculations under both models using your actual transaction mix
4. Consider seasonal fluctuations in transaction volume and card types
5. Factor in all additional fees, including chargeback fees, PCI compliance fees, and currency conversion

By understanding these pricing models and performing these calculations, you’ll gain clarity on your true EFTPOS costs and make informed decisions about which pricing structure best suits your business.