Do you currently impose a surcharge on customers who pay by card? If you are a small business, you need to be aware that new rules will soon limit how much you can charge.
Recent changes to the Consumer Credit Act have imposed a ban on businesses from charging payment surcharges that are excessive. This ban currently applies to large businesses, and will be extended to smaller businesses from 1 September 2017.
Under the new rules, the amount of your card surcharge must not exceed your applicable costs of accepting that payment type. In most cases, this ‘cost of acceptance’ will be the amount directly charged to you by your bank for card acceptance (e.g. merchant service fees, and fees for the rental of payment card terminals). A small number of additional costs may be permissible (e.g. the cost of fraud prevention services paid to an external provider), but they must be able to be verified by contracts, statements or invoices. Internal costs (e.g. labour, electricity) can not be included.
As of 1 June 2017, your acquirer (in most cases your bank) has been required to provide you with statements that clearly set out your average costs of acceptance for each card scheme, which will be expressed as a percentage of the value of transactions for that card type (e.g. 1.3%). You can use this information to set your payment surcharge fee (if you decide to impose a surcharge). You might also like to use this information to compare what you’re being charged, and see if another bank can offer you a better deal.
For more information about the payment surcharging rules and how to calculate your ‘cost of acceptance’, the Australian Competition and Consumer Commission (who is enforcing the new rules), has published information on its website.
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