Cheaper coffee, anyone? Excessive payment surcharge ban now applies

Cheaper coffee, anyone? Excessive payment surcharge ban now applies

Starting from 1 September 2017, the excessive payment surcharge ban that previously only applied to large businesses since last year, now applies to all businesses that are either based in Australia or use an Australian bank.

Businesses are now restricted from charging customers for using an EFTPOS (debit/prepaid), MasterCard (credit, debit and prepaid), Visa (credit, debit and prepaid) and American Express cards issued by Australian banks.  Businesses may not charge more than their costs of processing the card payments.

If businesses wish to charge a single surcharge for multiple payment types, the surcharge must be set at the lowest cost.  For example, where a business’s processing fees for Visa Debit is 1 per cent, Visa Credit is 1.5 per cent and American Express is 2.5 per cent, the surcharge would have to be set at 1 per cent.

As a guide, the RBA has stated that processing fees are generally around the following amounts:

  • Debit cards: 0.5 per cent
  • Credit cards: 1-1.5 per cent
  • American Express: 2-3 per cent.

BPAY, PayPal, Diners Club cards, American Express cards issued directly by American Express, cash and cheque payments are not covered by the ban.

If you need advice regarding your compliance with the Competition and Consumer Act, including the Australian Consumer Law, please don’t hesitate to contact me at  or call me at 1300 033 934 for a no-obligation quote.

Source: ACCC