The ban on excessive payment surcharges extends to Australian small business

From 1 September 2017, Australian small businesses will be prohibited from swiping customers with excessive surcharges who pay credit, debit or prepaid cards. These laws have applied to large businesses since 1 September 2016.

large business is one who (together with any related bodies corporate) meets any two of these three criteria:

  • Consolidated gross revenue of $25m or more
  • Consolidated gross assets of $12.5m or more
  • 50 or more employees

From this September, all surcharges for using electronic payments cannot exceed the ‘cost of acceptance’, being the costs of processing the payment (bank fees and terminal costs) but excluding internal costs such as labour and electricity.

The ACCC also has powers to enforce the ban. The ACCC can issue a surcharge information notice that compels a business to provide evidence of their costs of processing a payment. If the ACCC finds a business has breached the ban, it may issue an infringement notice or take court action and seek pecuniary penalties of up to $1.1m per contravention.

The ban does not affect the existing requirements for businesses to state the total price when presenting prices to consumers (refer to previous ‘drip pricing’ actions) and to not otherwise make misleading claims about prices.

More on the ACCC website here. An interesting transcript from the Reserve Bank of Australia website on Card Payments and the Retail Sector here.

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Photo credit: Nick Youngson under a Creative Commons 3 – CC BY-SA 3.0 licence.