Firms warned not to overcharge for card payments

| July 6, 2018

The ACCC has reminded firms to adhere to the ban on excessive payment surcharging for MasterCard, Visa, EFTPOS, and certain types of American Express card payments.

The ban only affects your business if you choose to apply a surcharge on customers using these payment methods. If you do this, the surcharge must not be more than what it costs your business to process the payment – the ‘cost of acceptance’.

What can be included in the cost of acceptance?

It’s what your bank or payment facilitator charges your business.  These charges can include merchant service fees costs for rental and maintenance of payment terminals and additional costs for gateway fees or fraud prevention services.

What is excluded from the cost of acceptance?

Any of your own internal business costs, such as labour, rent or electricity costs are excluded.

Can I impose a flat fee surcharge?
Yes, but your bank or payment facilitator will usually provide you with information on your cost of acceptance. In most cases these costs are charged to you in percentage terms, so it’s more appropriate that any surcharges you impose are also expressed in percentage terms.

The ban doesn’t prevent you from imposing a payment surcharge as a flat or fixed fee, however any surcharge you impose must not exceed your cost of acceptance for any given transaction. For example, if you impose a 50 cent surcharge on a $4 coffee for card payments, it would be excessive if your cost of acceptance was only 4 cents (or 1%).

Top tips
Review your recent bank statements to ensure your surcharges don’t exceed the costs of acceptance.

Keep evidence that proves your surcharge reflects the cost of acceptance.

Clearly communicate any surcharges to your customers.

The ACCC will enforce the ban and can ask businesses to provide evidence that their surcharges reflect their cost of acceptance if they believe a business is overcharging their customers.

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