How to avoid fines for excessive surcharging

A recent story on 7News about excessive credit card surcharging revealed that several companies have been found to be in breach of the Competition and Consumer Amendment (Payment Surcharges) Act 2016. One large company was fined $350,000 by the ACCC for overcharging more than 60,000 customers.

What do businesses need to know about the Competition and Consumer Amendment (Payment Surcharges) Act 2016?

The Act bans businesses from charging a payment surcharge greater than their actual cost of processing. Typically banks charge different processing costs for debit, credit and prepaid cards. The cost can be passed on to customers as a payment surcharge, however it cannot exceed the cost. The following payment types are governed under the Act:

  • Mastercard
  • Visa
  • American Express companion cards

Many businesses charge one surcharge rate for all card payments due to lack of flexibility in their systems. This can be deemed to be in breach of the legislation if the bank charges different rates for debit, credit and prepaid cards, as a lower-cost payment type has been surcharged at a higher rate. Customers may then lodge a complaint with the ACCC, and the ACCC’s investigation may result in a fine and/or court action if the business is found to be in breach of the Act. (Click here for more information.)

How can you ensure you are not over surcharging?

MerchantSuite offers a dynamic surcharging feature that enables merchants to customise surcharges based on the actual processing fees. Merchants can set multiple triggers to yield the correct surcharge for each payment type, allowing you to recoup the processing fees while avoiding customer complaints and fines. This feature can easily be turned off for instances when you do not wish to apply a surcharge at all, such as not-for-profits receiving donations.

Browse our website for a complete suite of omnichannel solutions that simplify, safeguard and streamline your payments. 

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