For Australian acquirers, network fees (also known as scheme fees) on foreign-issued cards run about 13 times higher than on domestic cards.
Last quarter, acquirers paid Visa and Mastercard about 1.56% of transaction value in net network fees (also known as scheme fees) on foreign-issued cards, compared with about 0.12% on domestic cards.
Foreign cards were only about 4% of the volume, but they made up about a third of what acquirers paid in net network fees: A$138 million (US$94 million) out of A$400 million (US$272 million). Rebates offset almost none of it, about 3%.
Australia will cap interchange on foreign-issued cards at 1.0% from April 2027. That cap doesn't apply to network fees, and the RBA has said it considered the risk that the networks raise scheme fees to make up the difference.
For acquirers anywhere with travel, tourism or cross-border e-commerce volume, cross-border network fees deserve a close look. They're among the most complex fees on the invoice, and at these rates small classification or billing issues add up quickly.
Part 3 of a short series on what Australia’s new network fee data shows.