Published on Aug 22, 2017

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Excess surcharges banned for all businesses

 

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Are you are charging your customers more than it costs you to process EFT payments? The Australian Competition and Consumer Commission (ACCC) is reminding businesses that they have banned excess surcharges from 1 September 2017.

 

From 1 September all businesses that choose to charge customers a payment surcharge for card payments can only charge the cost of acceptance.

 

The ACCC is reminding businesses whether customers pay by credit card or debit card, businesses can only charge customers the ‘cost of acceptance’.

 

The ‘cost of acceptance’ is the cost to a business to process a card payment, including terminal fees and bank costs.

 

This includes merchant service fees, rental and maintenance for payment card terminals and other fees incurred.

Be aware that the cost of acceptance doesn’t include costs like wages or electricity.

 

Your bank or payment facilitator will provide you with a statement outlining the average of the cost of acceptance incurred for card payments.

 

“Banks are required to send businesses merchant statements which clearly set out the business’ costs of acceptance for each payment method. The ACCC urges businesses to follow up with their bank if they have not yet received these statements,” ACCC Deputy Chair Dr Michael Schaper said.

 

The cost of acceptance will vary depending on the card scheme, for example whether credit or debit card and will be provided on your bank statement as a percentage per card scheme.

 

The type of payments affected include credit, debit and prepaid cards for Eftpos, Mastercard, Visa. It also includes American Express Companion cards which are issued through and Australian financial service provider.

 

According to the ACCC,  if your cost of acceptance is 1% for Visa Credit, you can only surcharge 1% on Visa credit card payments.

 

Failing to comply with the ban can lead to fines from the ACCC of up to $126,000 for listed corporations and further injunctions or pecuniary penalties.

 

Don’t get caught out! If you haven’t already done so it’s time to start reviewing your surcharges now so you can be ready when the deadline arrives on 1 September.

 

Read this guide to payment surcharges by the ACCC, or visit ACCC Payment Surcharges for more information.