Least Cost Routing Adoption Trends in Australia
Least Cost Routing (LCR) adoption in Australia has grown steadily and is now mainstream for in-person payments.
As at December 2025, 84 per cent of merchants had LCR enabled for in-person transactions, according to the Reserve Bank of Australia (RBA). Online is the frontier - LCR is available to 97 per cent of merchants for online transactions, but actual enablement varies dramatically depending on the provider.
In short
- 84% of merchants have in-person LCR enabled (RBA, December 2025)
- Up from 70% in June 2024 - adoption has climbed every reporting period
- Online LCR is available to 97% of merchants, but only 3 of 11 large providers have it switched on for most of their merchants
- RBA research finds debit acceptance costs are nearly 20% lower for merchants with LCR turned on
- The RBA publishes provider-by-provider enablement data every six months
What is Least Cost Routing?
LCR allows eligible dual-network debit card transactions to be routed through the lowest-cost network - typically EFTPOS rather than the international card schemes. Because most Australian debit cards support two networks, the routing choice directly determines the cost of each transaction. (See: What is Least Cost Routing? in the glossary.)
How has LCR adoption grown?
The RBA has published six-monthly enablement data since 2022, and the trend is consistently upward for in-person payments:
- June 2024 - 70% of merchants had in-person LCR enabled (RBA)
- June 2025 - over 80% enabled (RBA)
- December 2025 - 84% enabled (RBA)
The RBA notes that this rollout has put downward pressure on wholesale debit costs across the market - meaning even merchants without LCR enabled have benefited indirectly.
The online gap: available is not the same as enabled
For online (card-not-present) transactions the story is different. Availability is near-universal at 97 per cent of merchants, but the RBA reports that only three of eleven large providers have online LCR switched on for most of their merchants. Enablement rates at December 2025 span from 100 per cent to effectively zero:
The RBA attributes much of the online gap to gateways and third-party providers whose platforms require further work before LCR can be offered - and it has stated it expects providers, including payment gateways, to accelerate progress.
What is LCR actually worth?
The RBA's April 2024 Bulletin study, The Effect of Least-cost Routing on Merchant Payment Costs (based on merchant-level data covering around 525,000 merchants across eight providers) found the cost of accepting debit card transactions is nearly 20 per cent lower for merchants with LCR turned on, with results varying by merchant size.
For businesses with meaningful debit volume, routing is one of the few payment costs that can be reduced without changing anything the customer sees.
Where is LCR policy heading?
In its March 2026 conclusions to the Review of Merchant Card Payment Costs and Surcharging, the RBA maintained its expectations-based approach: providers are expected to enable LCR for merchants who would benefit and to pass the savings on.
The Bank has flagged online LCR enablement as the area where providers still have the most work to do, and it continues to publish named, provider-level enablement tables - making each provider's LCR posture a matter of public record.
What does this mean for your business?
- If you accept in-person debit payments and LCR is not enabled, you are likely in the shrinking minority paying more than necessary
- If you sell online, ask your provider specifically about card-not-present LCR - availability claims and actual enablement are very different things
- The RBA's six-monthly tables let you check exactly where your provider stands
Enablement, not availability, is where providers differ most - and it is worth noting that Fat Zebra is the only provider in the RBA's December 2025 table with online LCR enabled for 100 per cent of merchants, a result of routing infrastructure built locally around Australian debit rails. Whichever provider you use, the RBA's published data makes it straightforward to hold them to account on routing.
Frequently asked questions
Is LCR mandatory in Australia?
No. The RBA uses an expectations-based approach rather than formal regulation, but it publishes provider-level enablement data every six months and has signalled it expects continued progress - particularly online.
Does LCR work for online payments?
Yes. Online (card-not-present) LCR is available to 97 per cent of merchants, but whether it is actually enabled depends heavily on your gateway or provider - enablement ranges from 100 per cent to near zero across large providers (RBA, December 2025).
How much can LCR save?
RBA research found debit acceptance costs nearly 20 per cent lower for merchants with LCR enabled, though savings vary by merchant size and existing pricing.
How do I check whether my provider supports LCR?
The RBA publishes provider-by-provider LCR availability and enablement tables twice a year on its Least-cost Routing page.
Sources
- RBA - Update on availability and enablement of least-cost routing for merchants, data as at December 2025 (published March 2026): https://www.rba.gov.au/payments-and-infrastructure/debit-cards/least-cost-routing/update-on-implementation.html
- RBA - LCR update, data as at June 2024: https://www.rba.gov.au/payments-and-infrastructure/debit-cards/least-cost-routing/updates/lcr-update-on-implementation-0624.html
- RBA - LCR update, data as at June 2025: https://www.rba.gov.au/payments-and-infrastructure/debit-cards/least-cost-routing/updates/lcr-update-on-implementation-0825.html
- RBA Bulletin (April 2024) - The Effect of Least-cost Routing on Merchant Payment Costs: https://www.rba.gov.au/publications/bulletin/2024/apr/the-effect-of-least-cost-routing-on-merchant-payment-costs.html
- RBA - Review of Merchant Card Payment Costs and Surcharging, Conclusions Paper, Ch. 7: Least-cost Routing (March 2026): https://www.rba.gov.au/payments-and-infrastructure/review-of-retail-payments-regulation/2026-03/conclusions-paper/least-cost-routing-of-debit-card-transactions.html
