Published on Nov 22, 2016
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ACCC is set to crack the whip on businesses who pass on the wrong surcharges.
Following the Senate passing of the Competition and Consumer Amendment (Payment Surcharges) Bill 2015 earlier this year, your EFTpos surcharges are in the spotlight. This ruling gives the ACCC the power to enforce penalties for Australian businesses who are charging customers excessive surcharges for card payments.
Big businesses still charging excessive surcharges after 1st September this year will find themselves in hot water. For small business operators the changes to surcharge rules will not come into force until 1st September 2017.
While additional fees and charges are often hard to swallow from a consumer’s point of view, this new regulation is positive news for consumers and merchants alike:
- Surcharge profiteering is OUT
Without regulation, some merchants have been profiteering from the collection of surcharge. Some industries have been bending the rules more than others, with the airlines, utilities and taxi companies the main culprits. These new laws now make this practice non-compliant.
- What is included in “cost of sale”?
Merchants who don’t pass on surcharge to recover their transaction costs, often “hide” the fees into their pricing or sacrifice at a greater expense.
- Consumers are surcharge savvy
Consumers are clued in to what constitutes an “excessive” surcharge. The Reserve Bank of Australia deems anything above 2% for Visa/Mastercard is “excessive”, and anything above $0.50 (or 0.5% of the transaction) for debit card.
- Merchants are bound by law
To stay compliant, business owners will need to spend time conducting a regular review of all debit and credit card transactions. This is not only tedious but could become very costly for many businesses.
Surcharging made easy
Third party solutions have taken the hassle out of merchant fees. Businesses can now use third party companies such as Zefpay and use a ‘zefpos’ machine in place of their traditional EFTpos machine.
Using Zefpay, businesses keep 100% of their sale, get paid daily, don’t pay merchant fees or GST on a surcharge. It works with any bank and is free for the business to use provided eftpos credit card revenue is over $5000 each month.
Zefpay’s Managing Director Dan Tewson says it makes good business sense.
“With profits being squeezed by merchant service fees, utilising a third party surcharge tool such as Zefpos can cut costs and mitigate risk of non-compliance.”
Gain more information on this third party payment solution.
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