On 1 September 2017, it became illegal for Australian businesses to charge their customers with excessive charges for using EFTPOS and credit cards to pay for purchases.

Essentially, this means that businesses will only be able to charge customers what it costs to process payments for EFTPOS and credit cards.

In a recent interview with ABC online, Dr Michael Schaper (ACCC Deputy Chairman) gave a simple example of what the new laws mean for Australian businesses.

“For example, if a business’s cost of acceptance for Visa credit is 1.5%, consumers can only be charged a surcharge of 1.5% on payments made using a Visa credit card”, said Dr Schaper.

“Our advice for businesses wanting to set a single surcharge regardless of the type of card their customers use, it must be the lowest of all the payment methods”, Dr Schaper continued.

That means if a business’s cost of processing for Visa debit is 1% while its cost for Visa Credit is 1.5% and for American Express is 2.5%, the single surcharge would need to be 1% – the lowest of all payment methods.

The effect of the new laws governing EFTPOS and Credit Card transactions can be summarised as follows:

  • Laws commenced on 1 September 2017
  • The EFTPOS and Credit Card surcharges imposed on customers must match the cost paid by the business to the financial provider
  • EFTPOS Minimums aren’t affected, but any surcharge fee levied on customers for these transactions must also match the amount paid to the finance provider
  • Fines for breaches of the new news range from $2,520 to $126,000 and vary according to the size of the business.

Further information on the operation of the new laws can be found on the ACCC website via: https://www.accc.gov.au/consumers/prices-surcharges-receipts/credit-debit-prepaid-card-surcharges.