Payment surcharges

If a business chooses to impose a surcharge on its customers for making a payment using a credit, debit or prepaid card, the level of the surcharge must not be excessive. The ACCC will investigate complaints of excessive payment surcharging and take enforcement action where necessary.

The ban

On 25 February 2016 the Competition and Consumer Amendment (Payment Surcharges) Act 2016 became law. It inserted a new part into the Competition and Consumer Act 2010 (CCA) banning excessive payment surcharges and provided new powers for the ACCC.

The ban is found in the CCA, and operates in conjunction with a Reserve Bank of Australia (RBA) standard.

The purpose of the ban is to stop businesses from charging payment surcharges that are excessive. You are not prohibited from recovering your applicable costs of accepting payments. However, excessive surcharging of customers for use of a particular payment method is prohibited.

See: Q&A: Payment surcharges

Requirements for businesses

The ban applies to all businesses, regardless of their size.

You do not have to impose payment surcharges on accepted payment methods. If you do not impose any payment surcharges on your customers, the ban will have no impact on you.

However, if you choose to impose a payment surcharge on a payment type covered by the ban, the amount of the surcharge must not exceed your applicable costs of accepting that payment type.

Your acquirer (bank) or payment facilitator (if you use one) is required to provide you with statements that clearly set out your average costs of acceptance for each card scheme. This amount will be set out as a percentage.

You will be sent monthly statements and an annual statement. The statements will assist you to determine the level of surcharge you can pass on to your customers, should you decide to do so. If you have not received any statements you should contact your bank.

In most cases the permissible surcharges you can impose will be no greater than the amount you have been charged by your bank.

See: Payment surcharges – only charge what it costs you

Enforcing the ban

The ACCC is responsible for enforcing the ban. We will investigate complaints relating to excessive payment surcharges.

We can issue surcharge information notices, and these will require a business to provide us with evidence of their costs of processing a payment, in comparison to the surcharges they are applying, in order to determine whether or not their surcharges exceed the permitted level.

If the ACCC has reasonable grounds to believe that a business has breached the ban, we can issue an infringement notice or take court action against the business, seeking pecuniary penalties.

See: What are the penalties?

Remember, the ban does not alter your existing Australian Consumer Law obligations. You must not make false or misleading representations about the price of your goods or services, or engage in component or partial pricing, where the upfront advertised price only constitutes part of the total price of the goods or services.

See: Displaying prices

More information

Q&A: Payment surcharges

Payment surcharges – only charge what it costs you

Review of card payments regulation: conclusions - RBA media release

Payment Surcharges: Economics, Regulation and Enforcement - RBA article

Credit, debit and prepaid card surcharges - for consumers