Credit and debit card surcharges will soon be subject to limits under new laws that aim to prevent merchants charging excessive fees when accepting card payments.
The effect is that you can’t charge more than it costs them to accept card payments. You will only be able recover costs which are directly related to the card transaction and are documented in a contract with the company that facilitates the payment.
To help ensure you don’t overcharge consumers, each year banks will supply information about the acceptance costs of various card payment systems as a percentage. You can use this information to set your surcharge for the following year.
For ‘large merchants’, the limits take effect on 1 September 2016. For all other business, the start date is 1 September 2017. A ‘large merchant’ is a business who, for the financial year ended 30 June 2015, had at least any two of the following: consolidated gross revenue of $25 million, consolidated gross assets of $12.5 million plus or 50 employees.
Businesses who over-charge may find themselves in trouble with the ACCC who is responsible for monitoring excessive surcharges.
Author: Jaime Lumsden Kelly & Marcus Wong, The Fold