In February 2016, the Competition and Consumer Act 2010 was amended by the inclusion of provisions that ban corporations from charging an excessive amount for processing payments. A number of carriers operating in Australia have historically imposed surcharges for credit card payments that allegedly exceeded the cost to those carriers of processing those payments. In consequence, all carriers will need to ensure that any surcharge imposed for paying by credit card, or by any other means, is not excessive.
Whether a charge is excessive will be determined by reference to a standard to be published by the Reserve Bank of Australia (RBA). The draft standards which were published in a Consultation Paper in December 2015 proposed a standard under which a merchants could impose surcharges up to the average cost of acceptance over a 12 month period. The cost of acceptance is defined more narrowly than the existing 'reasonable cost of acceptance' standard and includes only the following four costs:
- merchant service fees in respect of the relevant payment scheme;
- fees for the rental and maintenance of payment card terminals;
- fees incurred in processing the relevant transactions; and
- other fixed fees for providing payment acquiring equipment and services referable to the relevant payment scheme.
To facilitate greater transparency, and enforcement, credit card issuers will be required to provide at regular (at least quarterly) statements to merchants setting out the cost of acceptance over that period.
The prohibition will not take effect until the date set out in the final RBA standards document.