How to tell if least cost routing is enabled on your EFTPOS machine

Least cost routing is the setting that lets your terminal send an eligible debit tap down the cheaper network instead of the default one, and on a lot of terminals in Australia it is sitting switched off. Nobody is going to ring and tell you. It costs your provider money to turn on and it costs you money to leave off, which tells you everything about who is motivated to raise it.

Here is how to find out where you stand, in the order I’d actually do it.

What it is, in one paragraph

Look at the debit card in your wallet. If it has a Visa or Mastercard logo and an eftpos logo on it, that is a dual-network card — two sets of rails on one piece of plastic. When a customer taps it, the terminal picks which set to use. Left alone, most terminals pick Visa or Mastercard, because that is the default the card was issued with. Least cost routing means the terminal is instead told to pick whichever network costs you less on that transaction.

Your provider might call it LCR, merchant choice routing, merchant routing or smart routing. Same thing. The name changes depending on who is selling it to you.

Check 1: your statement, not your terminal

The fastest check is your merchant statement, and what you are looking for depends on how you’re priced.

If you’re on interchange-plus-plus or cost-plus, your statement itemises the networks. You’ll see eftpos lines and you’ll see Visa and Mastercard debit lines. If there is debit volume on the statement and essentially none of it is sitting against eftpos, routing is off — or it’s on and almost nothing is eligible, which is a different conversation.

If you’re on a blended rate, your statement shows you one percentage and tells you nothing. That is the point of it. You cannot answer this question from a blended statement, so skip to check 3 and ask them.

Check 2: the receipts

Pull a handful of debit receipts from a normal trading day — not a quiet Tuesday morning, a busy one, because you want a spread of card types.

The receipt names the application that processed the transaction. You’re looking for whether small debit taps are coming through as eftpos (often printed as SAV, CHQ or EFTPOS) or as Visa Debit and Debit Mastercard. If every single one says Visa or Mastercard, you have your answer.

Two things will muddy this, and both are normal:

Phone and watch taps don’t route. A card tokenised into Apple Pay or Google Pay generally can’t go down the eftpos rails, so those transactions will always show as Visa or Mastercard no matter what your settings say. If a large share of your customers pay by phone — and in a café it is a very large share now — routing has less to work with than you’d hope.
Single-network cards don’t route either. Plenty of debit cards have no eftpos logo at all. Nothing to choose from.

So you are not looking for every transaction to move. You are looking for some.

Check 3: ask them, in writing

This is the one that actually settles it. Email your provider — not a phone call, because you want the answer in text you can keep — and ask these four questions:

Is least cost routing enabled on my terminals? All of them, or some?
What is the routing rule — does it always send eligible debit to eftpos, or only above or below a certain transaction value?
If it is enabled, what has it saved me in the last three months?
If it is not enabled, what happens to my rate if you turn it on?

Question two matters more than people expect. Routing isn’t a simple on-off switch for every provider. Some apply it only above a dollar threshold, because on very small transactions eftpos’s flat-cent structure can work out worse for you than a percentage. A threshold set sensibly is a good thing. A threshold set at a level that conveniently excludes most of your volume is not, and you won’t know which you’ve got unless you ask for the number.

Question four is the one they’ll dodge.

The trap: switching it on and saving nothing

This is the part nobody explains, and it’s the reason I’d have the pricing conversation at the same time as the routing one.

If you’re on a blended rate — one flat percentage on everything — then routing a transaction to a cheaper network reduces your provider’s cost, not your rate. You still pay 1.4%, or whatever you agreed. The saving lands with them. You have done the merchant equivalent of switching to a cheaper electricity plan and never telling anyone to change your bill.

So the useful question isn’t just “is it on.” It’s “is it on, and does my pricing let me see the benefit.” If the answer is “on, and blended,” you have grounds to renegotiate the rate, because their cost of serving you just dropped and yours didn’t.

Why this is worth more from 1 October 2026

Until now, a merchant carrying too much cost on card acceptance had an escape hatch: surcharge it and pass it to the customer. From 1 October that hatch closes for debit and credit card surcharges, and the cost lands on your margin instead.

That doesn’t change how routing works. It changes what it’s worth. Every basis point you were previously handing to customers is now yours to absorb, so the settings on your terminal stop being a technicality and start being margin. If you’re going to audit one thing on your account this year, this is cheap to check and it compounds every day it’s on.

It’s worth most where the transactions are small and frequent — cafés and takeaway above almost anyone, because a shop full of $5 and $6 debit taps is exactly the traffic routing was designed for. It’s worth least where your average sale is large and your customers pay on credit cards, which don’t route at all.

If the answers don’t add up

Two responses should make you push harder. “It’s already optimised” is not an answer to question one — optimised isn’t a setting, enabled is. And a flat refusal to tell you what routing has saved you usually means either it isn’t on, or it is and the benefit isn’t reaching you.

At that point you’re not really asking a technical question any more, you’re asking whether your provider is working for you. Get your last three months of statements together, and if you want someone to read them and tell you whether least cost routing is on, what it’s worth on your card mix, and what your rate should be once it is, that’s the job — no charge for the read.