Ban on charging excessive amounts on payments now enforced across Australia

Ban on charging excessive amounts on payments now enforced across Australia

7 September 2017

From 1 September 2017, the Australian Competition and Consumer Commission (ACCC) will be enforcing a ban on all businesses across Australia charging excessive or unreasonable amounts on payments made to them by EFTPOS and (most) credit cards.

Large businesses have been banned from doing so since September 2016, and from 1 September 2017 it applies to all businesses that charge a different amount for card transactions compared to cash.  It restricts the amount which businesses can charge for using cards issued by Australian banks.

The ban does not mean that there can be no surcharge applied, rather that a business may only pass on a surcharge of what it actually costs them to process that payment through their bank, and not any internal or administration costs.

Businesses may set different amounts for each payment method used, based on how much it costs them.  Alternatively they may set a standard rate for credit cards or EFTPOS as a group, however this must be set at the rate for the lowest cost method of payment for all credit cards or EFTPOS, rather than an average.

Businesses should have received notices from their Australian financial institutions which inform them of the rate of surcharge they will be allowed to pass on to their customers, if you have not, we recommend contacting your bank.

Note these changes do not impact on whether a business is obligated to accept card payments, only on the charges where cards are used.

The ACCC website has resources to assist or please contact your local Boyce accountant.

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