Excessive fees for payment by card are banned
From today, all Australian businesses are banned from charging customers with excessive surcharges when they use EFTPOS and credit cards to pay for purchases.
The excessive surcharge ban had applied to large businesses since September last year.
But now, it’s been extended to all businesses that are either based in Australia or that use an Australian bank.
The ban restricts the amount a business can charge customers for using an EFTPOS (debit and prepaid), MasterCard (credit, debit and prepaid), Visa (credit, debit and prepaid) and American Express cards issued by Australian banks.
The bottom line is that businesses can from today only surcharge what it actually costs them to process card payments, including bank fees and terminal costs.
“For example, if a business’s cost of acceptance for Visa Credit is 1.5 per cent, consumers can only be charged a surcharge of 1.5 per cent on payments made using a Visa credit card,” Australian Competition and Consumer Commission Deputy Chair Dr Michael Schaper said.
“Our message to business is that you are not allowed to add on any of your own internal costs when calculating what surcharge you will charge customers. The only costs businesses can include are external costs charged to you by your financial provider.”
The ACCC says any business wanting to set a single, flat surcharge across multiple payment methods needs to set the surcharge at the level of the lowest cost method, not an average.
For example, if a business’s cost of acceptance for Visa Debit is 1 per cent, for Visa Credit is 1.5 per cent, and for American Express is 2.5 per cent, the single surcharge would have to be 1 per cent, the lowest of all payment methods.
The ACCC has been given new powers to enforce the ban.
Payment types not covered by the ban include BPAY, PayPal, Diners Club cards, American Express cards issued directly by American Express, cash and cheques.
by Leon Gettler, September 1st 2017
