Bank card machine quotes in South Africa: what to ask before you sign

Part of Fees and rules by country. See the guides for every market we cover.

Search for a bank's name plus "card machine" in South Africa and you will find thousands of people asking the same thing. FNB, Standard Bank, Absa and Nedbank each draw hundreds to a thousand searches a month. People want to know how to get one, what it costs and whether it is worth it.

This guide does not quote bank rates. They are individual, they change and a number copied from a web page would be out of date by the time you read it. Instead it shows you how to read any bank's quote, what questions to ask, how to put the answers into a monthly figure and how to test the result against a no-contract alternative. It applies equally to any of the major banks.

What does a bank quote usually contain?

Bank card machine arrangements tend to look different from a single flat percentage. A quote may combine several pieces.

Because every bank does it slightly differently, the quotes are hard to compare by eye. The way round that is to turn each one into a monthly rand figure for your own sales.

How do you turn a quote into a monthly figure?

The calculation takes five steps. Use your last three months of sales.

1. Split your sales by debit and credit. Your current statement or bank report may show it.
2. Multiply each by the rate in the quote.
3. Add the monthly rental and any other fixed fees.
4. Apply any minimum. If your commission is below the minimum, use the minimum.
5. Add VAT if the quote excludes it, and divide the total by your sales for the effective rate.

A worked example

A shop takes R60,000 a month, with R45,000 on debit cards and R15,000 on credit cards. A hypothetical bank quote offers 1.50% on debit, 2.40% on credit and R150.00 a month machine rental, with a R300.00 minimum commission, all before VAT. These figures are hypothetical.

The effective rate before VAT is 1,185 ÷ 60,000 = 1.98%. Compare that with a flat 2.30% on the same R60,000, which is R1,380.00 before VAT.

On these assumptions the bank quote is cheaper by R195.00 a month, or R2,340 a year, because most of the sales are debit and the bank prices debit lower. If the same shop took mostly credit, the answer would reverse. This is why the split matters.

What a debit-heavy or credit-heavy shop should look for

Your card mix changes which quote wins.

• Mostly debit: look for a provider that prices debit separately and lower. A flat rate that treats debit and credit the same overcharges on debit.
• Mostly credit or premium cards: a flat rate may be better than a quote with a high credit rate.
• Mostly small payments: watch for per-transaction charges, which are less common on in-person machines but exist on some plans. See authorisation and per-transaction fees.
• Seasonal sales: a minimum monthly commission can hurt in quiet months. See the minimum monthly service charge.

One reported South African comparison makes the same point: a small shop whose customers mostly pay by debit is paying credit-card prices on them if its provider charges one flat rate.

What should you ask each bank?

Ask each bank the same questions, and get the answers in writing.

1. What is the commission for debit and for credit cards, and is VAT included?
2. Is there a monthly rental, and who owns the machine?
3. Is there a minimum monthly commission or a monthly account fee?
4. What is the contract term and the notice period?
5. What does it cost to leave early, including returning the machine?
6. How and when is money settled, and is there a charge for faster settlement?
7. What are the charges for chargebacks, refunds and support?
8. Will you write the quote against my last three months of sales?

Our guide to contract length, auto-renewal and notice periods explains why the dates matter, and early termination fees shows how exit costs are worked out.

Bank or fintech?

Both have strengths.

• A bank machine can make sense if you want to keep everything with your existing bank, you have steady volume or you value in-branch support. It may also suit a business that wants lower rates on a large, debit-heavy turnover and does not mind a term.
• A fintech machine usually has no contract, no monthly fee on its basic plan and quick set-up, which suits small, new or seasonal businesses. See Yoco, iKhokha, SnapScan and Paystack compared.

Compare them on your own sales, with every cost counted. A bank's lower rate with a rental and a term can beat a fintech flat rate, or lose to it. The only way to know is to calculate.

What do people overlook?

• The cost of the machine at the end. Do you own it, return it or keep paying?
• Settlement time. Waiting an extra day or two for your money has a cost to cash flow.
• Support when the machine fails. How quickly is it replaced?
• The terms for increases. Can the bank change its rates or rental during the term?
• Whether the rate applies to all your cards. Some cards may be charged at a different rate.

What is regulated and what is not?

The South African Reserve Bank regulates interchange for certain payment streams, but each acquirer sets its own merchant commission. That is why banks, fintechs and gateways can charge very different amounts for the same payment. Our South African card machine fees guide explains the layers.

For consultants

Bank quotes are a good place to add value because merchants find them hard to read. Offer to turn each quote into a rand figure on the merchant's own sales, and to put the bank and fintech options side by side. If the bank is the better fit, say so. The checkmyrates calculator lets you enter debit and credit commission, rental and minimums, and shows the effective rate and annual cost.

Frequently asked questions

How do I get a card machine from FNB, Standard Bank, Absa or Nedbank?

Contact the bank's merchant services team, ask for a quote against your monthly sales and compare it with other providers. The process and the documents needed vary by bank.

What does a bank card machine cost?

It varies by bank, your sales and your card mix. A quote usually combines a monthly rental, a commission by card type and sometimes a minimum. Convert it into a monthly rand figure on your own sales.

Are bank card machine rates better than fintech rates?

Sometimes. Banks may price debit lower and offer lower commissions on steady volume, but they often add rental and a contract. Compare the all-in monthly cost.

Is there a minimum monthly commission?

Some bank quotes include one. If your sales are low or seasonal, it can raise your effective rate. Ask before you sign.

Is VAT included in the quote?

Often it is not. Ask each bank, and compare all quotes on the same basis.

Can I switch from a bank machine to another provider?

Yes, subject to your contract term, notice period and any exit costs. See our guides on cancelling and switching before you act.

Figures in this guide are examples to show the method. Fees, rules and rates change, so check your own statement, contract and current rules before you decide. This is general information, not financial or legal advice.