Surcharging
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      Calculating a Weighted Surcharge Rate

      Guidance for setting an appropriate surcharge rate

      Differential Surcharging

      The cost of accepting payments varies depending on the card type and payment method. Differential Surcharging automatically adjusts the surcharge applied to a purchase based on the card and payment method your customer uses.

      If your terminal doesn’t support differential surcharging, you can calculate a weighted average surcharge rate. This allows you to set a single surcharge that reflects your blended cost of acceptance across all eligible transaction types.

      Step-by-Step: How to Calculate a Weighted Average Surcharge Rate

      Let’s walk through an example using a small business owner named Harry.

      Step 1: Identify your cost of acceptance

      Harry pays the following fees per transaction type:

      • 0.7% for contactless debit transactions

      • 1.5% for Mastercard and Visa contact or contactless credit transactions

      Step 2: Analyse your transaction mix

      Over the past 24 months, Harry’s data shows:

      • 40% of purchases are contactless debit

      • 20% are Mastercard and Visa credit (contact/contactless)

      • 40% are cash or EFTPOS (cheque/savings) and not eligible for surcharging

      So, of the 60% of transactions eligible for surcharging:

      • Contactless debit = 66.7% (40/60)

      • Credit = 33.3% (20/60)

      TIP: You can download a transaction report from Verifone Central to help analyse your volumes. However, Verifone Central does not distinguish between credit and debit contactless transactions. For more accurate breakdowns, refer to your Merchant Service Fee statements or contact your business bank for support.

      Step 3: Calculate your weighted average surcharge rate

      Multiply each cost by its transaction share:

      • Contactless debit: 0.7% × 66.7% = 0.467%

      • Credit: 1.5% × 33.3% = 0.5%

      Add the two together:
      0.467% + 0.5% = 0.967%

      Harry can apply a 0.967% surcharge to all eligible card transactions

       

      IMPORTANT

      • Your surcharge must only reflect the additional cost of acceptance (usually your Merchant Service Fee).

      • General business costs—like POS rental, wages, or electricity—cannot be included.

      • The Retail Payment System Act 2022 requires that your surcharge must not exceed your additional cost of acceptance.

      • Rates in this example are for illustrative purposes only. Always consult your bank or payment provider for actual rates.

      For more information and guidelines regarding surcharging practices, visit the Commerce Commission website.