⚡️⚡️⚡️
With energy prices rising, switch to a cheaper plan
💡
Compare Prices Now
⚡️⚡️⚡️

Debit Card Surcharges in Australia June 2022

In Australia we have laws to protect you from excessive debit card surcharges.

We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!

Did you know that surcharges can also apply to debit card transactions? Surcharges are meant to cover the costs a merchant incurs for processing your payment, and Australia has laws in place to ensure you won’t be hit with excessive fees the next time you pay with your debit card.

Credit card surcharges are one of the most annoying things about shopping with plastic. Depending on the type of card you use and the merchant you buy from, you could be slugged with a surcharge anywhere between 0.5% and 3% of your total transaction amount.

What are debit card surcharges?

Whenever you buy goods or services using a debit, credit or prepaid card, the merchant will incur its own bank costs for processing that payment. Some merchants will include those processing costs in the fee they charge for goods and services, but others will cover their costs by imposing a surcharge on card-based transactions.

A debit card surcharge is an additional amount a business charges when you pay for a purchase using your debit card rather than another payment method, for example, cash.

Promoted
Bank account offer
HSBC Everyday Global Account
Promoted
$0
monthly fee
$0
ATM withdrawal fee
  • Google Pay, Apple Pay
  • Monthly fees: $0
  • No international transaction fees
  • Up to 10 currencies

HSBC Everyday Global Account

Earn 2% cashback on tap and pay purchases. T&Cs apply.
Earn 2% cashback on tap and pay purchases. T&Cs apply.

Compare Debits Cards below

1 - 6 of 6
Name Product Contactless Payments Instant Payments ATM Withdrawal Fee Monthly account fee
HSBC Everyday Global Account
Google Pay, Apple Pay
N/A
$0
$0
Earn 2% cashback on tap and pay purchases. T&Cs apply.
Enjoy no minimum ongoing balance or transaction requirements and the flexibility to hold up to 10 currencies. Apple Pay and Google Pay available.

Westpac Choice
Apple Pay, Google Pay, Samsung Pay, Fitbit Pay, Garmin Pay, Digital Card
Osko, PayID
$0
$5
Use your Westpac Digital Card in the Westpac App to make contactless purchases 24/7 with no physical card.
No monthly account keeping fee for customers under 30 or if you meet the deposit conditions.
Shop safely online with Westpac Digital Card. Your 3-digit security number refreshes every 24 hours to keep your details safe.
MyState Bank Glide Account
Google Pay, Apple Pay, Samsung Pay, Fitbit Pay, Garmin Pay
Osko, PayID
$0
$0
Simplify your everyday banking with these sleek digital features.
$0 monthly account fee.
Choose the way you pay with access to Google, Samsung and Apple Pay plus Fitbit Pay and Garmin Pay. Send and receive money in less than 60 seconds with PayID.
Westpac Choice Student
Google Pay, Apple Pay, Samsung Pay, Fitbit Pay, Garmin Pay
Osko, PayID
$0
$0
$0 account keeping fee for students and customers under 30
Make purchases 24/7 using your Westpac Digital Card in the Westpac App.
Students will pay no monthly account keeping fee with no deposit conditions to meet. Pay with your phone or wearable device anywhere and anytime, and access cash without your debit card using Cardless Cash.
Up Everyday Account
Google Pay, Apple Pay, Samsung Pay, Fitbit Pay, Garmin Pay
Osko, PayID
$0
$0
A transaction account designed for your smartphone with spending categorisation and a round-up feature to help you save. No international transaction fees and no ATM fees in Australia.
Macquarie Transaction Account
Apple Pay, Google Pay
PayID
$0
$0
Earn a variable base rate of 1.5% p.a. on your transaction account balance with no conditions to meet.
$0 account keeping fees.
This interest-earning transaction account charges no account fees, no international fees and gives refunds on all Australian ATM fees.
loading

Compare up to 4 providers

How much are debit card surcharges?

According to the Reserve Bank of Australia (RBA), the cost of processing a debit card transaction is usually quite low. Accepting a Visa or Mastercard debit transaction will typically cost a business around 0.5% of the transaction value.

However, prior to 2016, merchants were free to choose the surcharge amount they imposed on different card transactions, so there may have been instances where you’ve been slugged with a surcharge well above 0.5%.

The RBA also points out that processing credit card transactions usually results in higher expenses for businesses, with costs of up to 1–1.5% for Visa and Mastercard credit card transactions and 2–3% for payments made with an American Express credit card. As a result, credit card surcharges tend to be higher than debit card surcharges.

What about if I use payWave or PayPass?

Where matters get even trickier is if you pay for purchases using Visa’s payWave or Mastercard’s PayPass feature. This is due to the fact that tap and go (or contactless) transactions are processed through the same system used for credit card transactions – so even if you tap and go using your debit card, you may be hit with a higher credit card surcharge.

For example, many shoppers are unaware that Aldi’s 0.5% credit card surcharge also applies to contactless payments made with a Mastercard or Visa debit card.

When shopping at a store that applies a surcharge to credit card transactions, you can avoid this additional fee by steering clear of contactless payments. Instead, make sure to swipe or insert your debit card at the payment terminal.

How to avoid debit card fees and surcharges

Fortunately, debit card fees have decreased a lot since 2016, when EFTPOS surcharge laws in Australia changed.

Legislation was introduced in February 2016 to stop businesses imposing excessive surcharges on debit, credit and prepaid card transactions. The Competition and Consumer Amendment (Payment Surcharges) Act 2016 was brought in to stop businesses charging customers more than what it costs them to process the payment.

Under the legislation, if a business chooses to impose a payment surcharge, it is only legal to pass on to the customer the costs incurred by the business for accepting that particular payment type.

Businesses are unable to get around the laws by giving surcharges a different name, for example, handling or service fees.

If a merchant imposes these types of fees and they are payable only on certain payment methods (such as credit cards) but not on others, the ban still applies. If the handling fee applies regardless of the payment type (eg a handling fee on a concert ticket purchase), that's allowed.

Note that there are some payment methods not covered by the ban, such as PayPal, BPAY, Diners Club cards, American Express cards issued directly through American Express, cheques and cash. The ban also doesn’t apply to payments made for taxi services, which are the responsibility of regulators in each individual state.

These days, the only fees you'll pay are the small fees incurred by the business, which is generally around or less than 0.5% on a debit card. Every merchant or seller is legally allowed to charge these fees, so to avoid those fees altogether, you may need to pay with cash, or find a a debit card with no transaction fees and/or no foreign transaction fees.

You may also be interested in

Bank of Queensland Simple Saver Account

Bank of Queensland Simple Saver Account

The Bank of Queensland Simple Saver Account offers an ongoing interest rate with no account conditions to meet. Open up to 9 accounts.

Read more…
Illawarra Credit Union Term Deposit $25,000+

Illawarra Credit Union Term Deposit $25,000+

Earn a special fixed interest rate for terms of 1 or 2 years in length when you invest at least $25,000.

Read more…
Great Southern Bank Goal Saver Account (18-24 year olds)

Great Southern Bank Goal Saver Account (18-24 year olds)

The Great Southern Bank Goal Saver Account has an ongoing bonus rate on balances up to $50,000 for customers aged 18-24.

Read more…
RBA cash rate rise: Will you get a higher rate on your savings?

RBA cash rate rise: Will you get a higher rate on your savings?

The cash rate has gone up for the first time in more than 11 years as the Reserve Bank of Australia tries to combat rising inflation. Home loan rates are rising – but so are savings rates.

Read more…
Newcastle Permanent Smart Saver Youth Account (under 25s)

Newcastle Permanent Smart Saver Youth Account (under 25s)

The Newcastle Permanent Smart Saver Youth Account has an ongoing bonus rate for customers under 25.

Read more…
Bank of Queensland Smart Saver Account (36+ year olds)

Bank of Queensland Smart Saver Account (36+ year olds)

The Bank of Queensland Smart Saver Account has an ongoing bonus rate on balances up to $250,000 for customers over 36.

Read more…

More guides on Finder

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.

2 Responses

  1. Default Gravatar
    AliceJune 10, 2019

    When I went to hire a car today I was told at the cash register that there was a $400 “deposit” for using a debit card. This was nearly twice the amount of the original transaction. Information about this additional fee was on the website well it was on a page linked to the website via a link and a drop down or two. The account I was emailed did not advise me of the potential increase in cost.

    It seems both unfair and questionable to sneakily add on this fee. Can they do this?

    • Default Gravatar
      NikkiJune 11, 2019

      Hi Alice,

      Thanks for your inquiry.

      As it says on our page: whenever you buy goods or services using a debit, credit or prepaid card, the merchant will incur its own bank costs for processing that payment. Some merchants will include those processing costs in the fee they charge for goods and services, but others will cover their costs by imposing a surcharge on card-based transactions.

      A debit card surcharge is an additional amount a business charges when you pay for a purchase using your debit card rather than another payment method, for example, cash.

      According to the RBA, using a debit card will typically cost a business around 0.5% of the transaction value. Prior to 2016, some merchants were free to choose the surcharge amount they imposed on different card transactions, so there may have been instances where you’ve been given a surcharge 0.5%.

      Hope this was helpful. Don’t hesitate to message us back if you have more questions.

      Best,
      Nikki

Go to site