ACCC: Excessive Payment Surcharges Ban Commences Today
The Australian Competition and Consumer Commission (ACCC) has reminded large businesses that a new ban on charging consumers excessive payment surcharges commences today.
ACCC chairman Rod Sims stated that “the amount a large business can charge customers for use of payment methods, such as most credit and debit cards” is limited by the new law.
“Businesses can only pass on the permitted costs of the payment method, such as bank fees and terminal costs,” Sims commented.
“The new law has caused many large businesses to review their pricing practices. We expect to see a move from flat-fee surcharges for purchasing items like flights towards percentage-based or capped surcharges.
“The ACCC is aware that some event ticketing companies are intending to change their pricing practices from 1 September, such that consumers will no longer be charged fees based on the payment method chosen.”
The ACCC has advised that, as a guide, the RBA has indicated that the costs to merchants of accepting payments by debit card is in the order of 0.5 per cent and by credit card is 1-1.5 per cent, and for American Express cards is 2-3 per cent, while the costs for some merchants might be higher than these indicative figures.
In its first year, the law only applies to large businesses, which are defined as having two of: gross revenue of $25 million or more, gross assets worth $12.5 million or more, or with 50 or more employees.
From September 1, 2017, the law will apply to all businesses.
Businesses can still charge other fees, such as “booking fees” or “service fees”, which apply regardless of the payment method, while still complying with the Australian Consumer Law, ensuring the disclosure of any such fees is upfront and clear.