With Australians potentially losing billions of dollars in card surcharges each year, a new survey shows that two in three people have been hit with fees that they weren’t even aware of.
Research carried out by Choice found that 66 per cent of people it surveyed reported that businesses often apply card surcharges without telling them.
More than two-thirds (68 per cent) do not expect to pay a surcharge when they pay a bill by inserting their debit card.
“People should be able to trust that the price advertised is the price they’ll pay at the checkout. Our research shows that surcharges often catch consumers off guard, and almost 9 in 10 Australians think that businesses should be required to disclose surcharge amounts,” said Tom Abourizk, Choice Head of Policy.
The research found that 88 per cent think that businesses should be required to tell customers the amount of a surcharge, while 83 per cent do not think applying a surcharge for paying by cash is fair and only 15 per cent of people think that applying a surcharge for paying by card is fair.
“A ban on debit card surcharges would provide consumers with one surprise-free way to pay, but all excessive surcharges need to be addressed. With modern technology, it doesn’t make sense for any kind of card payment, for any value, to cost consumers or businesses extra dollars,” added Abourizk.
The federal government said last month that it is prepared to ban debit card surcharges from January 1, 2026, subject to a review underway by the Reserve Bank.
Under the existing laws, businesses can charge customers an extra fee to cover payment processing costs. However, they cannot charge any more than that cost.
The government has said that it is warning banks and payment service providers that unless they stop charging “excessive” surcharges, the government will crack down on that practice.
Last month, the government announced $2.1 million new funding for the Australian Competition and Consumer Commission (ACCC) to tackle excessive surcharges. The funding is aimed at enabling the consumer watchdog to crack down on illegal and unfair surcharging practices and increase compliance activities.
Some banks have defended the practice of card surcharges, with Commonwealth Bank chief executive Matt Comyn even telling a parliamentary inquiry in August that his bank’s payments services for merchants made a loss.
Some retailers are taking measures to bypass the traditional payment systems to do away with card surcharges.
Chemist Warehouse is now attempting to skirt around big credit card fees by introducing a new way to pay using QR codes. Starting early next year, it will introduce its new QR payment method online and in stores. It involves customers taking a photo of a QR code instead of paying with a card or tapping a terminal, a process known as Pay by Bank. The new system includes PayTo which allows merchants to extract funds straight from a customer’s bank account.
