If you're a small business that accepts card payments, listen up. This is the end of the era of excessive payment surcharges. A year ago, a ban on excessive credit card surcharges was introduced for large businesses. Now, as of 1 September 2017, all businesses accepting card payments must comply.

Under the ban, businesses can only pass on the actual cost of processing a credit card payment.

Here's how the rules work.

  • It's up to a business whether it wants to absorb credit card processing fees into its prices, or apply a surcharge.
  • If the business applies a surcharge, it can only charge the actual cost of processing the credit card payment for Eftpos, MasterCard, Visa, or American Express.
  • If the processing cost is calculated as a percentage of the purchase price, then a surcharge can also be the percentage.
  • You can also set a fixed surcharge (rather than a percentage) so long as it accurately reflects the actual cost of the transaction.
  • If you want to set a single surcharge for all payment methods, you have to use the lowest cost surcharge, you can't use an average.
  • If you don't comply with the rules, you can face spot fines or court penalties with maximums in excess of $1M.

So, not naming names, but to the coffee place around the corner that charged us a $0.50 surcharge on a $3.50 coffee, you'd better get your act into gear. Either you're gouging us on