Excessive credit and debit card surcharge ban

As of 1 September 2017, it is illegal for businesses of all sizes to charge excessive surcharges on certain credit, debit and prepaid card payments. The ban covers Visa and MasterCard credit cards, debit cards, prepaid cards and American Express "companion cards" which are issued by a bank. As businesses incur costs to process credit, debit and prepaid card transactions, they are entitled to pass that cost on to the consumer who chooses to use those payment methods. However, they can only charge the customer what the business was charged for processing that payment. The level of cost incurred depends on the payment method and the size of the business. Typically, the costs incurred by businesses to process payments are:

• 0.5% Debit card
• 1-1.5% Visa and MasterCard credit card
• 2-3% American Express credit card

If a business chooses to charge a flat surcharge fee across all payment methods, it is entitled to do so as long as it is not excessive for any given transaction. This means that the surcharge must be set at the lowest cost of all the payment methods. This ban on excessive surcharges does not apply to PayPal, BPAY, American Express credit cards issued directly by American Express, Union Pay, JCB, Diners Club, cash or cheque. It also does not apply to the taxi industry. However, it does cover hire cars and ride sharing services. If you think you have been charged an excessive payment surcharge, contact the ACCC (https://www.accc.gov.au/contact-us/contact-the-accc). The ACCC is responsible for enforcing the ban and has the power to investigate, issue infringement notices and take court action against a business that the ACCC believes has charged an excessive payment surcharge.