I have been researching this recently. (Not becoming a merchant, just out of interest)
Damn is it complicated.
Different fee rates for Credit vs Debit Cards.
Different fee rates for Rewards vs Non Rewards.
DIfferent fee rates for in person vs online.
Interesting how even though it is the merchants who pay the fees, it is everyday consumers who actually pay in terms of prices higher than they otherwise would be. A great business model from Amex, Mastercard, Visa and the Banks, when you think about it.
Only the third point above has a possible justification in terms of different fee rates (since there could be more fraud with online transactions).
Apparently Merchants are charged more for Credit vs Debit, because there is 'increased risk of non payment'. However, I thought the credit contract was between the bank and the cardholder (and the cardholder pays an interest rate for this risk). The merchant has nothing to do with the credit contract. So I cannot see how banks can justify charging more.
With regard to the second point, again, rewards cards are agreements between Bank and Cardholder. Merchant has nothing to do with it.
If it weren't for this opague and gouging monopoly system, we would already be completely cashless.
The only reason there are some places that are still cash only is because they don't want parasities taking a cut of their revenue.
There is some cost to eftpos terminals in terms of computers etc, but they should be heavily regulated like utilities (Water, Electricity, etc) to get a fair return, not a supernormal return where executives get million dollar bonuses.
And then there are some banks that 'provide analytics based on cardholder data'. That's rubbish as well. Banks should not be profiting from that either.
Competition fails again while the phrase "competition lowers prices" gets repeated endlessly and the masses ignore reality.
Quite a feat really considering it's the masses money that's removed from them.