A new law has been passed which puts the spotlight on all those little surcharges you’ve become so used to when making a purchase using plastic. From concert tickets, to your upcoming flights to Fiji, to your morning coffee when you forget to bring cash, all those extra dollars add up. And when you consider that Australia spends roughly $45 billion per month through card transactions, it’s no wonder that surcharging has become a profitable business.
The Competition and Consumer Amendment (Payment Surcharges) Bill 2015, which passed in the Senate on Monday, implements a new framework to ban excessive surcharges for card payments. In particular, the amendments apply to excessive surcharges in relation to payments covered by a Reserve Bank standard or by regulations made for this purpose. Put simply, a card surcharge must be relative to the genuine cost incurred by a merchant in accepting a payment by card.
The ACCC has new powers to enforce the ban, including the ability to request supporting evidence to justify payment costs. It will be an offence to fail to comply with such a request. If the ACCC considers a surcharge to be excessive it may issue an infringement notice, including a penalty for listed corporations of up to 600 penalty units (currently $108,000) for each alleged contravention.
The ban will be fully operational as soon as the Reserve Bank has released its Payments System Board standards that set permitted surcharges for payments. These should be released within the next few months. In the meantime, we recommend all consumer facing entities consider re-evaluating the surcharges they are imposing for card payments.