ACCC bans excessive surcharges on credit card transactions

Federal consumer law regulator the Australian Competition and Consumer Commission (ACCC), recently announced a nationwide ban on excessive card surcharges.

This is good news for consumers as the ban restricts the amount a business can charge them for using certain types of cards to make payments. This includes EFPTOS, Visa, MasterCard and American Express cards issued by Australian banks.

As a result of this, businesses may only charge what it actually costs them to process card payments. The ban prevents businesses from passing on their own internal costs to consumers who pay by card.

“[I]f a business’s cost of acceptance for Visa Credit is 1.5 per cent, consumers can only be charged a surcharge of 1.5% on payments made using a Visa credit card,” ACCC Deputy Chair Dr Michael Schaper said. “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.”

Consumer should be aware that some payment types are not covered by this ban, including BPAY, PayPal, Diners Club cards, American Express cards issued directly by American Express, cash and cheques.

You can read the full media statement from ACCC here.

If you believe you may have been charged an excessive surcharge, please call CCLSWA for advice on (08) 9221 7066.

CCLSWA Editor