CUSTOMERS paying by EFTPOS will be spared excessive fees, thanks to a new ban stopping businesses from charging expensive surcharges.
From today (September 1), all businesses across Australia will be restricted on how much they charge customers paying by debit card, MasterCard, Visa and American Express cards issued by Australian banks.
"The good news for consumers is that businesses can now only surcharge what it actually costs them to process card payments, including bank fees and terminal costs," said the Australian Competition and Consumer Commission's deputy chair Michael Schaper.
"For example, if a business's cost of acceptance for Visa Credit is 1.5 per cent, consumers can only be charged a surcharge of 1.5 per cent on payments made using a Visa credit card.
"Our message to business is that you are not allowed to add on any of your own internal costs when calculating what surcharge you will charge customers. The only costs businesses can include are external costs charged to you by your financial provider."
If businesses want to set a single surcharge across multiple payment methods, the surcharge must be set at the level of the lowest cost method, not an average. For example, if a business's cost of acceptance for Visa Debit is 1 per cent, for Visa Credit is 1.5 per cent, and for American Express is 2.5 per cent, the single surcharge would be 1 per cent as that is the lowest of all payment methods.
"Our advice for businesses wanting to set a single surcharge regardless of the type of card their customers use is it must be the lowest of all the payment methods. You can't use an average of all payment methods or you will land yourself in trouble," Dr Schaper said.
The ban was first applied to big businesses last year and now extends to all businesses either based in Australia or use an Australian bank.
