Commerce guide
Card machine fees in South Africa, compared honestly
The rate on the sales page is rarely the rate you pay. How to work out your blended cost across the machines sold to small merchants here.
The rate on a card machine advertisement is the best case, for one card type, at a turnover most small merchants never reach. Here is how to work out what you will actually pay.
Four numbers, not one
A card machine costs you four things. The hardware, whether bought or rented. Any monthly plan fee. The transaction rate. And the payout fee, if there is one.
Advertising focuses on the third of those, and usually on the lowest version of it. Work out all four against your own turnover and the ranking changes more often than you would expect.
Debit and credit are priced differently
This is the detail that catches most merchants. The very low rates in this market apply to local debit cards. Credit card rates are higher and, on at least one major provider, they do not fall as your turnover grows at all.
So a business whose customers mostly pay by credit card cannot use the debit headline rate to compare anything. Pull a month of settlement reports and find out what your actual split is before you choose. It is the single most useful hour you can spend on this decision.
When a monthly plan fee makes sense
Providers offering tiered plans charge a monthly fee for a lower rate. The arithmetic is simple. Divide the monthly fee by the rate saving, and that is the turnover you must exceed for the plan to pay.
Take a plan costing R249 a month that saves you one tenth of a percentage point. R249 divided by 0.001 is R249 000 of monthly card turnover before you break even. If you are turning over R60 000, the cheaper plan with the higher rate is the better deal, whatever the sales page implies.
Rent or buy the hardware
Rented terminals carry a monthly cost forever. Bought terminals are a single outlay from about R699. Over three years buying is almost always cheaper, and it means a quiet month costs you nothing.
The counter argument is cash flow and replacement. A rented machine is usually replaced by the provider when it fails. A bought machine outside its guarantee period is your problem. Neither is wrong, but know which model you are agreeing to.
VAT and settlement timing
Rates in this market are quoted excluding VAT, which is the industry convention. Add fifteen percent to compare against anything quoted the other way, and remember that if you are VAT registered you can claim it.
Then check settlement. Next business day is common, same day is available from some providers depending on which bank you use, and slower settlement is a real cost to a business managing cash weekly even though it never appears in a rate table.
Ask what happens on a disputed transaction
Chargebacks are uncommon and unpleasant. A cardholder disputes a payment, the amount is reversed while it is investigated, and you provide evidence that the sale was genuine.
Find out the process and any administration fee before you sign, and keep the paperwork that supports a sale. Providers differ considerably in how much help they give a small merchant here.
Common questions
01What is a good card machine rate in South Africa?
For a small merchant, anything from around 2.3 to 2.95 percent excluding VAT on local cards is normal. Rates below two percent generally apply to local debit cards at higher monthly turnover, not to every transaction.
02Are card machine fees quoted including VAT?
Almost always excluding VAT, which is the industry convention here. Add fifteen percent when comparing against a figure quoted the other way.
03Is it cheaper to buy or rent a card machine?
Over three years, buying is usually cheaper and means no fixed monthly cost. Renting shifts replacement risk to the provider. Machines start around R699 to buy in this market.
Editorial note
This guide is general buying guidance and not accounting, legal or tax advice. Amounts and deadlines set by SARS change, so confirm the current figures for your own business before you rely on them.