The Competition and Consumer Amendment (Payment Surcharges) Act 2016 commenced on 25 February 2016, the effect of which is to ban ‘excessive’ surcharges imposed by businesses on payments made by credit or debit cards.
In order for a business to comply with the new laws, any amount charged for processing a customer payment, or for using one payment method rather than another, will have to comply with the standard set by the Reserve Bank of Australia.
The RBA standard is being finalised and will be released later this year. In the meantime, the RBA has announced that businesses will be permitted to charge a processing fee for more expensive payment methods. It is likely that the RBA will deem any payment surcharge that is in excess of the cost incurred by the business to accept that particular payment type as in breach of the law.
In the coming months, businesses should consider whether the surcharges they currently impose on customer payments are higher than the costs incurred to accept that particular payment type and should readjust their surcharges accordingly.
A business that is found guilty of charging an excessive payment surcharge will be fined by the Australian Competition and Consumer Commission.