Which Bank has the Cheapest Merchant Account?

The following table (excluding the National Australia Bank & Westpac Bank information) is from the research conducted by Roger Keays: (please see here for the full article)

“The quotes I was given were based on volumes of 50 transactions / month with an average transaction amount of $100. You should definitely check with the banks for the latest prices.” – Roger Keays.

In order to use a Payment Gateway in Australia you will be required to establish a merchant account with one of the Australian Banks. There are several types of merchant accounts that Australian Banks offer so it’s important to note that you will be looking for an Online Merchant Account to use with a Third Party Payment Gateway. The Australian Banks have a list of Third Party Gateways which they support and you should not run into any trouble if you mention that you would like to connect with one of the following Payment Gateways in Australia – including, but not limited to:

Payment Gateway Online Merchant Account
FeesBendigoSt. GeorgeBankWestNABCommonwealth Bank of AustraliaWestpacANZ
Transaction Fee~1.8%2.75%1.69% + 13c0.8%-1.2%1.65% + 28c or $22/month1%-3%4.9% pr $50/month
Exit Fee$250 < 12mth--$150$110--

It is always best to check with your Australian Bank or the Australian Bank that you choose to open an online merchant account with for their current pricing. The Australian Banks are always modifying their online merchant account prices however this table should give you a good indication of the costs involved in establishing an online merchant account with an Australian Bank.

Why Do I Need A Third Party Payment Gateway?

Australian Banks such as ANZ & The Commonwealth Bank of Australia (CBA) on-sell a Payment Gateway called “MIGS” – MasterCard Internet Gateway Service. These Australian Banks will often mention that they have their own Australian Payment Gateway for merchants to utilize. ANZ has a product called eGate and CBA has a product called CommWeb; both of these products are a white labeled version of the MIGS platform which is owned and operated by MasterCard.

Put shortly – MIGS and other Payment Gateway products which are offered by the Australian Banks cannot do what a Third Party Payment Gateway such as Merchant Warrior, IP Payments or SecurePay are able to do. If you simply want to process transactions and you’re happy with limited support, then an Australian Bank Payment Gateway solution may be what you are looking for. However, if you value customized solutions, advanced reporting, fraud prevention, a support team that will actually answer your phone calls and help diagnose issues bundled with solutions to help you maintain PCI Compliance and integrate seamlessly with your application(s), then you will be looking for a Third Party Payment Gateway in Australia.

An Australian Third Party Payment Gateway is an Australian Bank’s Payment Gateway on steroids. A Payment Gateway in Australia is usually able to offer the following products:

  • Virtual Terminal – This allows merchants to process transactions manually, one-by-one over a web interface or application.
  • Hosted Payment Page – If you do not have a Web Developer to integrate your system or want to start processing transactions automatically without any hassles this is the best solution for you.
  • API – This helps Web Developers connect their application or website directly into the Australian Payment Gateway to process transactions seamlessly and automatically.
  • Token Payments – This is a product which has been developed to help merchants maintain their PCI Compliance ask your Payment Gateway in Australia about it.
  • Batch Processing – In short this allows merchants to upload a CSV file (Yes. Like an excel spreadsheet) directly to the Australian Payment Gateway who then processes the Credit Card Transactions.
  • Recurring Transactions – If you have a subscription based model and would like the Australian Payment Gateway to handle the processing of your recurring transactions (daily, weekly, monthly) then this is the solution for you.

This information may help you determine which solution is best for you. It often helps to have someone who can speak “Bank” with the Australian Banks to help you achieve the best solution and best pricing for an online merchant account. One local Australian Payment Gateway that is able to discuss your requirements with a number of Australian Banks and find the most cost effective online merchant account for you is Merchant Warrior. If you are looking to open an online merchant account and need some advice or assistance feel free to call them on (07) 3166 5489.