Per the Competition and Consumer Act 2010 (the CCA), a surcharge on card payments must not exceed the actual cost of processing the fee. The ACCC made this blatantly clear in November last year when it fined Red Balloon, the corporate gift agency founded by Shark Tank’s Naomi Simson, $43,200 for exceeding the caps set out under the CCA’s Surcharge Laws.
It is the responsibility of each business to ascertain the cost of processing card payments. A surcharge can include merchant fees, terminal rental fees and maintenance fees. As a loose guide, the Reserve Bank of Australia suggests that domestic eftpos processing fees should not exceed 0.5 % for debit card, 1.5% for Visa and MasterCard and 2% for American Express payments.
As of September 1, 2017, all Australian businesses big or small are prohibited from slugging customers excessive surcharges.
For tailored information regarding your obligations under the CCA, contact the business lawyers at Rankin & Co.
For general information, see the ACCC’s guide on prices, surcharges and receipts.