We previously wrote about the new excessive surcharge ban, but let’s talk a little more in-depth about how the ban will affect you and your business.
If your business charges a surcharge for credit, debit or prepaid card payments, it is time to review these charges. If you are a large business with gross revenue of $25mil+, gross assets worth $12.5mil+ or over 50 employees, the ban came into force on 1st September this year. The ban applies to all other businesses on the 1st September, 2017 under the Competition and Consumer Amendment (Payment Surcharges) Act 2016.
Under the new laws, businesses who choose to impose a payment surcharge may only pass on these costs to customers to the amount that the business incurred for accepting payment of that type. The ACCC now has the power to investigate and enforce the ban, so make sure you’re aware of the changes before you get hit with hefty penalties.
I know many business that place a surcharge on AMEX payments which now fall under the ban, so take care to ensure that you know what payment types are affected. Payment types falling under the ban have been outlined by the Reserve Bank of Australia, and include:
- Eftpos (debit and prepaid)
- MasterCard (credit, debit and prepaid)
- Visa (credit, debit and prepaid), and
- American Express “companion cards” (American Express cards issued through an Australian financial service provider, rather than directly through American Express).
Notably, BPAY, PayPal, Diners Club cards, American Express cards issued directly by American Express, cash and cheques are not covered by the ban.
The RBA has provided some guidance as to what an appropriate surcharge may amount to, suggesting a charge of 0.5 per cent of the transaction value may be reasonable for accepting Visa or MasterCard debit transaction however the safest course is to ensure that the amount you charge does not exceed the amount that you pay.