A new law implemented on September 1 now prohibits business owners from charging their customers with excessive fees on credit, debit and prepaid cards.
So, what’s considered to be excessive? According to deputy chairman of the Australian Competition and Consumer Commission (ACCC), Michael Schaper, “if a business’ cost of acceptance for Visa credit is 1.5 per cent, consumers can only be charged a surcharge of 1.5 per cent on payments made using a Visa credit card”. In other words, businesses can only charge their customers with the fees they are charged by financial providers to process payments – such as bank fees and terminal costs.
Businesses are still able to set a flat fee across all payment methods, but there is a catch (of course). Rather than setting the fee at the maximum, or even average, of the businesses processing fees, business owners are required to set fees at the LOWEST rate. For example, if your business is charged a 1 per cent processing fee for Visa debit and a 2.5 per cent fee for American Express, then you would be required to set the 1 per cent fee as your flat rate or surcharge. This makes the pesky task of charging different fees for different payment methods more worthwhile.
With fines up to $126,000, you’ll want to make sure your business is following the rules. Book an appointment with us today and we’ll make sure you’re safe.