Excessive surcharge ban – make sure you’re not overcharging

What does the excessive surcharge ban apply to?

The ban on excessive surcharges applies from 1 September to small businesses who accept payment by EFTPOS, Visa, Mastercard or American Express cards issued by Australian banks.

It applies to:

• debit cards,
• credit cards,
• prepaid cards.

Any surcharge must be limited to the actual costs of the transaction which is charged to the business by an Australian bank or a bank which operates in Australia.

Your bank should have already sent to you information about how much they charge you for each EFTPOS or credit card transaction – if they have not, you should contact your bank to check the details.

What about differences between EFTPOS and credit card payments?

Different payment methods may attract different charges – this is because the different companies charge the banks different amounts.

If you choose to accept multiple forms of payment, which attract different charges, you can choose to charge a separate surcharge for each method of payment or you can charge a single fee.

***IMPORTANT***

If you choose to charge a single fee, you must choose the lowest fee. You cannot add them together or average them out without risking overcharging someone who uses the cheapest payment method.

Also, you can choose not to charge a surcharge at all and pay the banks the fee yourself as a cost of doing business as a lot of larger firms do – it is up to you.

Are there any exceptions to the excessive surcharge ban?

The ban does not apply to BPay, PayPal, Diners Club or American Express cards issued directly by American Express.

The Australian Competition and Consumer Commission (ACCC) is responsible for enforcing the ban – they will act on complaints from consumers. Penalties for excessive charging range from a fine of $12,600 for a company or $2,520 for an individual or sole trader to $1,358,910 if a company is taken to court for breaching the ban.

Want more info?

More information is available, including guidance information for businesses and consumers, on the ACCC website at www.accc.gov.au/update/ban-on-excessive-payment-surcharging