The ACCC is urging small business owners to start preparing for the ban on excessive payment surcharges that will apply to all businesses across Australia from 1 September 2017.

The new law limits the amount that a business can charge customers for use of payment methods such as EFTPOS (debit and prepaid), MasterCard (credit, debit and prepaid), Visa (credit, debit and prepaid) and American Express cards issued by Australian banks. It came into effect for large businesses last year.

“Small businesses that choose to impose payment surcharges should review their surcharge levels to ensure they are compliant when the ban starts applying to them in under two months,” ACCC Deputy Chair Dr Michael Schaper said.

“Businesses can only pass on to customers what it costs them to process a payment such as bank fees and terminal costs. For example, if your cost of acceptance for Visa Credit is one per cent you can only surcharge one per cent on Visa credit card payments onto your customers.”

Small businesses will shortly be receiving information from their bank, which will help them to calculate appropriate surcharges when accepting debit and credit cards. The ACCC has also published a fact sheet so business owners can better understand their obligations.

“Banks are required to send businesses merchant statements that clearly set out the business’ costs of acceptance for each payment method. The ACCC urges businesses to follow up with their bank if they have not yet received these statements,” Dr Schaper said.

Passing on the cost of processing debit and credit card payments is not mandatory for businesses and the ban has no effect on those that do not impose a payment surcharge.

“In the lead-up to last year’s excessive surcharging ban on large businesses, many reviewed and amended their surcharging practices to reflect the costs to the business and we hope small businesses will do the same,” Dr Schaper said.

The ACCC has published guidance material for consumers and businesses.

Background

The ACCC has been given new powers to enforce the ban.

A surcharge will be considered excessive where it exceeds the permitted cost of acceptance, as defined by the Reserve Bank of Australia.

The RBA’s website also provides detailed information for businesses about the Standard, including how businesses can identify and quantify those costs that can be passed on to a consumer as a surcharge.

Payment types that are not covered by the ban include BPAY, PayPal, Diners Club cards, American Express cards issued directly by American Express, cash and cheques.