From 1 September 2017, a ban on excessive surcharges for using EFTPOS and credit cards to pay for purchases will apply to all Australian businesses. The ban, which has since 1 September 2016 been in effect for large businesses, will now extend to all businesses that are either based in Australia or use an Australian bank.
The ban means businesses, will now only be able to charge customers for what it actually costs them to process payments for EFTPOS, MasterCard, VISA and American Express cards, including bank fees and terminal costs. A payment surcharge will be considered excessive if it exceeds the permitted surcharge as defined by the RBA Standard and therefore exceeds the applicable cost of accepting that payment type. ACCC chairman Michael Schaper said, “Our message to business is that you are not to add on any of your internal costs when calculating what the surcharge you will charge customers will be.”
The ACCC has said that businesses which want to set a single, flat surcharge across multiple payment methods, must set the surcharge at the cost of the lowest-cost method, not an average.
How the ban will be enforced and what are the penalties for breach?
The ACCC, which is responsible for enforcing the ban, holds powers to enforce compliance with the ban and investigate complaints. Surcharge information notices can be issued by that ACCC to businesses and banks, mandating that they provide evidence of actual costs incurred by businesses for accepting payments, in order to determine whether or not their surcharges exceed the permitted amounts.
Dr Schaper said, “If you are getting charged a fee and you think it might be excessive, then obviously the first thing to do is to try and talk to the business itself and ask what it is about. If not you can certainly raise it with the Commission and we actually have fairly extensive powers and we can go back to businesses and ask them to validate.”
If the ACCC has reasonable grounds to believe that a business has breached the ban, it can issue an infringement notice or take court action against the business, seeking pecuniary penalties. The ACCC has said that businesses should have received merchant statements from their financial institutions in July, setting out their cost of acceptance for each payment method.
Payment types not covered by the ban include American Express cards issued directly by American Express, BPay, PayPal, Diners Club cards and cheques.
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