Merchant routing

Merchant Routing of Debit Card Transactions

Merchant routing is an initiative by regulators aimed at promoting competition in the debit card market, and helping to reduce payment costs in the economy.

Background on debit cards and payment costs

When a merchant (eg, a shop or business) accepts payment from a customer via a debit or credit card, the merchant is charged by its bank (or payments provider).  The cost the merchant faces from their financial institution can vary depending on which of the three networks processes the transaction (eftpos, Visa or Mastercard). For many merchants, payments via the eftpos network can be significantly less expensive than payments via the Debit Mastercard or Visa Debit networks.

What is merchant routing?

When you use contactless (‘tap-and-go’ / PayWave) with our Visa Debit card, the merchant may choose to send the transaction via the debit network that costs them the least to accept. This is merchant routing (also known as least cost  routing). If the merchant chooses not to route, the transaction will be sent via the default network, Visa Debit.

How to avoid merchant routing

To avoid merchant routing for your payment, you can make payments using:

• digital wallet (Apple Pay, Google Pay or Samsung Pay)
• insert your card at a payment terminal  and select “Credit”.

NOTE: You must have PayWave enabled on your physical card to use a digital wallet. 

To reduce your payment fees

To avoid or minimise your transaction fees, we offer our Relationship Rebate to members. Simply, the more business you have with us, the more “rebates” you’ll receive each month toward your transaction choices. The relationship rebate will be based on your average monthly balance and the first $5.00 of your transaction costs can be spent however you like. 

For more information about Merchant routing, please visit the Reserve Bank of Australia.