What's Least Cost Routing (LCR)?

  • In Australia, Multi Network Debit Card (MNDC) transactions are processed through one of three networks: Mastercard, Visa or eftpos. Each network charges different rates per transaction, which are then included in your monthly merchant fees.

    By opting into Least Cost Routing2, you can choose which network (Mastercard/Visa/eftpos) these payments are sent through. This could help you save on costs for your business.

    LCR is an optional feature, giving you the opportunity to save on fees whenever customers make an eligible transaction online with a MNDC. LCR is available on selected eCommerce solutions and pricing plans.

Understanding the options

If you enable Least Cost Routing, you'll be asked to select one of two options for processing your customers' payments. Which one you choose will depend on your individual business and will determine your potential savings. In order to decide, take the time to look at your transaction volumes, card mix and turnover in your most recent merchant statement which might help you save on fees.

Option 1: Mastercard and Visa networks only

  • Process all eligible MNDC transactions via Mastercard and Visa networks only

Option 2: eftpos network only

  • Process selected eligible MNDC transactions via eftpos network only

How it works

John’s Medical Centre – eftpos only option

John runs a medical centre where he sees lots of patients each day. After Medicare rebate, his average sale size is $70. John pays an average fee of 2% for each MNDC transaction processed through the Mastercard or Visa networks. He discovers that it would only cost him 0.9% for each payment processed through the eftpos network.

Based on an average sale size of $70, John pays $1.40 in fees to route a MNDC transaction. He decides to enable LCR in his BPOINT portal and sets the transactions to be routed through the eftpos network for $0.63 , and by doing so saves and average of $0.77 per transaction.

Current fees: Visa and Mastercard only – average $70 x 2% = $1.40 per transaction

Alternative option fees: eftpos only – average $70 x 0.9% = $0.63 per transaction

How to opt-in

  • 1. Check your eligibility

    • You must be on an Interchange Plus pricing plan with the BPOINT product.
    • Other eCommerce products are currently not eligible for LCR.
  • 2. Choose your preferred option

    Compare the fees you pay now with the fees you’d pay with the different LCR options to make an informed decision.

  • 3. Apply your setting

    After deciding what works best for you, contact our Merchant Support Team to help you enable your choice of LCR option. LCR can be enabled via the BPOINT portal.

    Call 1800 230 177

FAQs: What transactions and cards are covered?

Least Cost Routing only applies to multi-network debit card transactions. This means that the card must have a Mastercard or Visa logo on one side and the eftpos logo on the other. Most debit cards in Australia are multi-network cards.

Shop staff at work
  • Which transactions are ineligible for LCR?

    LCR isn't applicable to credit card transactions or Mobile Wallet transactions.

  • How does it impact surcharging?

    You'll still need to make sure you're only surcharging the amount it costs you to process transactions, known as the Cost of Acceptance.

    More about surcharging

  • How does it impact chargebacks?

    Chargebacks are still available for customers that opt into LCR.

    More about chargebacks

  • Does it impact settlements? 

    Whilst same day settlement is available for schemes, Mastercard and Visa settlement will include transactions made before 5:30 PM (Sydney/Melbourne time) and eftpos will include transactions made before 9:45 PM (Sydney / Melbourne time)

Contact the Merchant Support Team or your relationship manager for more information

Things you should know

  • As this information has been prepared without considering your objectives, financial situation or needs, you should, before acting on the information, consider its appropriateness to your circumstances. Please view our Merchant Agreement (PDF), Financial Services Guide (PDF) and Operator and User Guides at our merchant support hub.

    Mastercard and the Mastercard brand mark are registered trademarks of Mastercard International Incorporated. Visa is registered Trademark of Visa in the United States. Eftpos is a registered trademark of eftpos Payments Australia Ltd.

    1 You must be on an Interchange Plus pricing plan with BPOINT.

    2 Least Cost Routing is also known as Merchant Choice Routing. A reference in the Merchant Agreement dated 1 April 2020 to Merchant Choice Routing is also a reference to Least Cost Routing.