Excessive EFTPOS Fees Scrapped From 1st September 2017

Have you heard about the recent changes to credit card surcharging?  

The Australian Competition and Consumer Commission (ACCC) said the ban, which has been in effect for large businesses since last September, will extend to all businesses that are either based in Australia or use an Australian bank.

The Reserve Bank has announced last week new regulations aimed at preventing merchants from gouging customers on credit card fees.

The rules will be enforced by the Australian Competition and Consumer Commission (ACCC).

From 1st September 2017, an excessive payment surcharge ban will apply to all businesses in Australia, so you can only be charged what it costs businesses to process the payments (surcharges passed on to consumers will have to reflect the actual cost to the merchant).

The rules will be enforced by the Australian Competition and Consumer Commission (ACCC).

The ban will apply to:

  • Eftpos (debit and prepaid)
  • Mastercard (debit, prepaid and credit)
  • Visa (debit, prepaid and credit)
  • American Express (issued by an Australian bank)

A debit payment costs a business around 0.5 % of the transaction value, while a credit payment can cost between 2-3 % of the transaction value.

A business can choose to impose one surcharge across all payment types, but the percentage can’t be higher than the lowest permitted surcharge.

The ban has been in effect for large businesses since September 2016, but it will now apply to ALL BUSINESSES in Australia.

If you think you are being charged too much at the checkout, you can report the business to ACCC.

Key points 

  • Ban on excessive credit card surcharges extends to all Australian businesses September 1st 2017.
  • Customers should expect credit card surcharges to be no more than 1-3%, depending on the type of card.
  • The ban means businesses will only be able to charge customers what it actually costs them to process payments for EFTPOS, MasterCard, Visa and American Express cards, including bank fees and terminal costs.
  • Consumers who think they have been overcharged should talk to the business first and can also take their complaint to the ACCC

 How will the excessive merchant surcharge ban effect you?

  • The new standards will lower the cost of payments for retailers, meaning cheaper debit and credit card transactions for consumers.
  • For example, if a business’s cost of acceptance for Visa credit is 1.5 per cent, consumers can only be charged a surcharge of 1.5 % on payments made using a Visa credit card.
  • If you’re using a debit card you shouldn’t be paying any more than about half of 1 % cent.
  • If you are using a normal credit card you shouldn’t be paying any more than 1 to 1.5 %, that’s a Visa or Mastercard.
  • For example, if you buy a $4 coffee and get charged 50 cents for using your card, but the business pays only 1 % transaction fee, now you’ll only get charged 4 cents.

Leave a Reply

Your email address will not be published. Required fields are marked *