Excessive card surcharging will be banned for all businesses from today, 1 September, continuing the Turnbull Government’s ‘taking action now’ approach to delivering fairer financial services for Australians.
This action will ensure Australians are not ripped off when they make purchases with their cards. This will give consumers the confidence that any surcharge on card purchases will now have to reflect the true cost of the transaction, not an artificially inflated sum designed to profit gouge.
The extension of the ban to all businesses from today follows the regime applying to large businesses from 1 September last year.
This is practical action from the Turnbull Government and delivers immediate results for Australian households.
For example, major airlines have abandoned their unpopular flat fee surcharges and replaced them with charges that comply with the new restrictions.
Smaller businesses were granted extra time in which to prepare for the ban, but from today all those businesses will need to cease any excessive surcharging. If they continue to impose a charge for card payments, they must restrict it to their reasonable cost of acceptance of the payment.
Businesses have been on notice for more than a year to review their surcharging practices and make sure they understand and comply with their obligations.
Consumer watchdog the ACCC will act as a strong cop on the beat to police these rules. If people find that they are being hit with an excessive surcharge when they go to the shops, buy tickets online or book a holiday, they should not hesitate to contact them on 1300 302 502.
Many businesses choose not to impose surcharges. Where they choose to impose a charge for card payment, this should be made clear to the consumer.
As a guide, where a charge is imposed, consumers should expect to pay around 0.5 to 1 per cent for payment by debit card, 1 to 1.5 per cent by MasterCard and Visa credit cards and 2 to 3 per cent for American Express. If charges exceed these ranges, the matter can be raised with the ACCC for investigation.
A surcharge includes any charge based on type of payment method used. This would include for example, charges imposed for ‘low value’ transactions. Merchants that face some fixed costs for accepting low value transactions should ensure that any charges they apply do not exceed their cost of acceptance.
Banks have been required to provide statements with average costs of accepting each payment method to inform business decisions on surcharging.
The Turnbull Government is getting on with the job of acting now to deliver a fairer playing field for Australian families and businesses when it comes to financial services. Our sole focus is on delivering real outcomes, not years of talk.
Further guidance for businesses and consumers is available at: www.accc.gov.au.