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What your business needs to know about the ACCC surcharge ban


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The ban on excessive surcharges will apply to all businesses from 1 September 2017.

In February 2016, the Australian Competition and Consumer Commission (ACCC) introduced a ban on excessive surcharges charged by businesses, but so far this has only applied to large businesses. However, on 1 September 2017, this ruling will apply to all Australian businesses, and it's important to make sure that your business is ready.

This guide will explain what the ban is, what your business needs to do to make sure it complies with the ACCC ruling and what might happen if you don't.

What is the excessive surcharge ban?

The new ACCC ruling essentially bans businesses from charging excessive payment surcharges. Payment surcharges are usually charged to cover the costs incurred by a business for processing a debit or credit card payment. Businesses may charge their customers an extra amount on top of each individual sale or they may increase the cost of the goods or services depending on the payment method.

"Excessive" payment surcharges are those that exceed the permitted surcharge amount as defined in the RBA standard (permitted surcharges are outlined below).

What payment types are included in the ban?

IncludedNot included
  • EFTPOS (debit, prepaid)
  • Mastercard (credit, debit, prepaid)
  • Visa (credit, debit, prepaid)
  • American Express "companion cards"
    (ie, not issued directly through American Express)
  • BPAY
  • PayPal
  • Diners Club cards
  • UnionPay
  • American Express cards issued by American Express
  • Cash
  • Cheques

So, how much of a surcharge can I charge?

The monthly statements you receive from your payment facilitator will outline the cost of acceptance for each applicable payment type. This will be expressed as a percentage of the value of a transaction and this is how much you can charge as a surcharge. The ACCC also states that you can include the following costs in your payment surcharge (if you receive these services from a separate payment service provider) but that you will need to calculate the surcharge yourself:

  • Fees for the rental and maintenance of payment card terminals
  • Gateway fees
  • Cost of fraud prevention services
  • Fees or premiums to insure against "forward delivery risk"

Should I charge a fixed fee or a percentage?

Technically you can charge a fixed fee or a percentage, but the ACCC requires that your payment surcharges are expressed in percentage terms.

How have large businesses adapted to the surcharge ban?

When the ban came into effect for large businesses (defined as organisations with a revenue of over $25 million or with 50 employees or more), arguably, the largest change was required from airlines. Surcharges charged by airlines were previously as high as $30 for credit and charge card payments, which is 383% more than what it cost to process those payments.

Following the ban, these surcharges were brought in line with actual processing costs and expressed as a percentage of the sale with a maximum fee cap. For example, airlines can charge a 1.3% payment surcharge up to a maximum of $11 for Australian domestic flights for those booking with a credit or charge card.

What happens if I am found to be charging an excessive surcharge?

The ACCC has been given new powers to enforce this ban. It can issue surcharge information notices to businesses and banks in order to check the actual costs incurred by that business for accepting a payment method. If you receive an infringement notice, the fines range from $2,160 for a person other than a body corporate to $108,000 for a listed corporation.

If the ACCC takes you to court, the penalties are $233,100 for a person other than a body corporate and $1,164,780 for a body corporate.

When do I need to have appropriate surcharges in place by?

All businesses are subject to the excessive surcharge ban from 1 September 2017.

What if I have more questions?

The ACCC has provided a detailed guide on payment surcharges on its website.

Picture: Shutterstock

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2 Responses

    Default Gravatar
    GarySeptember 1, 2017

    How can a customer find out what the store’s cost is?

      Default Gravatar
      LiezlSeptember 2, 2017

      Hi Gary,

      Thanks for your question. I would recommend that you check the average costs for businesses according to the Australian Competition and Consumer Commission (ACCC).

      Moreover, merchants that charge a payment surcharge must ensure that consumers know a fee will apply, and the amount of that fee, before the transaction occurs.

      If you think you’ve paid an excessive surcharge, or if you don’t feel you were notified of the surcharge before you made a payment, contact the ACCC on 1300 302 502.


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