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NEW CREDIT CARD SURCHARGE RULES FOR SMALL BUSINESS

Monday, 13 November 2017

New rules limiting the surcharge businesses can charge on credit card transactions took effect on 1 September.

The new rules extend previous surcharge regulation from larger businesses to cover all businesses. The rules applied to large businesses from September 2016.

Treasurer Scott Morrison said the new rules are designed to stop excessive credit card surcharging.

He said the action “will give consumers the confidence that any surcharge on card purchases will now have to reflect the true cost of the transaction, not an artificially inflated sum designed to profit gouge.”

The Treasurer said smaller businesses were granted extra time to prepare for the ban, but if they continued to impose a charge for card payments, they must restrict it to their reasonable cost of acceptance of the payment.

Mr Morrison said: “Consumer watchdog the ACCC will act as a strong cop on the beat to police these rules.

He said, “Many businesses choose not to impose surcharges. Where they choose to impose a charge for card payment, this should be made clear to the consumer.

“As a guide, where a charge is imposed, consumers should expect to pay around 0.5 to 1 per cent for payment by debit card, 1 to 1.5 per cent by MasterCard and Visa credit cards and 2 to 3 per cent for American Express.

“If charges exceed these ranges, the matter can be raised with the ACCC for investigation.

“A surcharge includes any charge based on type of payment method used. This would include for example, charges imposed for ‘low value’ transactions.

“Merchants that face some fixed costs for accepting low value transactions should ensure that any charges they apply do not exceed their cost of acceptance.

“Banks have been required to provide statements with average costs of accepting each payment method to inform business decisions on surcharging.”

Further guidance for businesses and consumers is available on the Australian Competition and Consumer Commission website.

 

Further information

Treasurer's media release: Turnbull Government ban on excessive card surcharging extended to all businesses

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