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Least cost routing - testimonials from two small businesses

Updated: Feb 14, 2022

Implementing least cost routing can lead to significant savings for small business owners, as can attest these two newsagencies from Western Australia and Queensland.

Now, we know that a lot of people probably scratch their heads at hearing the words “least cost routing,” but it’s a term that everyone interested in small business policy should make a note of.

It refers to the fees that business owners (merchants) have to pay for offering card transactions. Card transactions can be routed through one of three networks: eftpos (the domestic network), Visa, or Mastercard (both international). Eftpos generally charges lower fees for merchants per transaction than do Visa and Mastercard. However, when contactless payments were introduced (Pay Pass, Pay Wave, Tap-and-Go), merchants found that their fees had increased, and this was because contactless payments were being automatically routed through the more expensive international networks of Visa and Mastercard. Least Cost Routing, therefore, is when the merchant chooses to have their customers’ debit card payments automatically routed through the least expensive network. Credit card payments have to go through the Visa or Mastercard networks.

LCR is particularly important for small business people know about in 2020, seeing that e-commerce and contactless card payments are more popular than ever due to hygiene concerns.

Please share this message and the testimonials below with the small businesses in your network. And if you know of anyone who has successfully implemented least cost routing and made savings from it, let us know. We would love to hear from them.

(Though these are both customers of Suncorp, Suncorp is not the only bank to offer LCR).

Margaret River newsXpress

“We have now been with the Suncorp merchant facility for 7 weeks or so at the recommendation of ALNA. We have thought for too long that our Merchant Fees with our bank, (one of the big 4), were far too high in a climate of increased cashless transactions. But they were not responsive to a request to change and, in fact, wanted to raise our fees. The switch to the Suncorp EFTPOS pin pads was done in house by a technician who was able to integrate the 2 of them into our POS without any disruption to our ability to serve customers. We had to do the usual paperwork associated with opening a Suncorp account for the funds to be deposited in and we were a little wary of the fact that we would need to make the effort each day or so to transfer those funds back into our business account. That minor effort has proven to be totally worthwhile because we have seen a significant drop in the our Merchant fees for the first full month of September compared to the month of July with our business bank of the last 20 years.

Now I know we aren’t comparing “apples with apples” using 2 different months of trade, but September was far busier than July, so it only emphasises more the reduction of fees from Suncorp. The difference in the Merchant fees paid was $700 less in September than what we were charged in July by our previous merchant provider. At this early stage we are extremely happy with the switch to Suncorp and at this stage it is certainly all that it was portrayed to be by Dean and ALNA”.

Peter & Leonie Holtfreter

Margaret River newsXpress

Western Australia

Rode News

“We have been customers of Suncorp for many years and have benefited from their lower rates. We changed to Least Cost Routing in June 2019, and noticed a decrease in merchant costs of 23%. Unfortunately, like many retailers our merchant costs rose with the impact of COVID. In July 2020, Suncorp changed their Least Cost Routing charges. Our merchant fees decreased by 19%. Comparing our now costs to that those when we first changed to Least Cost Routing our fees have decreased over 35%.

For us this has equated to savings of hundreds/month. You just need to do the sums to see the benefits. “

Susanne Brough

Rode News


COSBOA is part of the Fairer Merchant Fees Alliance, an advocacy group for least cost routing. The alliance published a guide for merchants which you can read here.


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