Ban on excessive credit and debit card surcharges
Eateries around Australia have been warned.
On Friday last week, September 1, the new rule came in prohibiting businesses from slapping excessive surcharges on credit card and debit card payments.
There had been a ban on excessive surcharges for larger businesses since last September. That’s what caused the airlines to scrap fees of about $7 for paying for a domestic flight via credit card, instead moving to a percentage fee
Now it’s been extended to all businesses. No exceptions.
The new rule prohibits small business owners from charging any more in surcharges than what it costs them to accept payments made through EFTPOS, Visa, MasterCard or American Express cards issued by banks.
Of course, no single figure can be deemed to be “excessive” because card payments vary between banks and small business owners.
But here’s the rule of thumb: according to official figures, merchants typically pay their banks about 0.5 per cent of the transaction's value for debit card payments.
For Visa and MasterCard payments, it’s 1 to 1.5 per cent, and for American Express it’s 2 to 3 per cent.
And the Australian Competition and Consumer Commission has the power to enforce it too.
It’s been given the power to issue fines of $2500 for sole traders that breach the rules, $12,000 for proprietary limited companies, or $120,000 for an ASX-listed company.
As for more serious breaches, the ACCC can seek penalties of up to $1.3 million from a court.
Bessie Hassan of Finder.com says business owners should check their bank statements, to avoid the threat of fines or damage to their reputations.
"If customers cotton on that you're charging more than you should, you could risk losing loyal customers," Ms Hassan told Good Food.
Deputy chair of the Australian Competition and Consumer and Commission, Michael Schaper said the regulator’s concern was more about the systemic issues.
"The ACCC is not lying awake at night worrying about every coffee shop in the country, obviously our priority for these are large, systemic issues affecting large numbers of businesses,” Mr Schaper told Good Food. “We expect small businesses to comply, but we understand that some of them are going to have to grapple with some of these issues.”
by Leon Gettler, September 1st 2017
