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As of today, every business in Australia will be banned from charging customers excessive surcharges for using certain types of EFTOPS, MasterCard, Visa and American Express cards to make payments.
The ban has been in effect for large businesses since September but will now extend to all businesses either based in Australia or that use an Australian bank.
Australian Competition and Consumer Commission deputy chair Dr Michael Schaper says this is good news for consumers.
"The good news for consumers is that businesses can now only surcharge what it actually costs them to process card payments," says Schaper.
"For example, if a business's 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."
"Our message to business is that you are not allowed to add on any of your own internal costs when calculating what surcharge you will charge customers. The only costs businesses can include are external costs charged to you by your financial provider."
If businesses want to set a single surcharge across multiple payment methods, the surcharge must be set at the level of the lowest cost method, not an average.
For example, if a business's cost of acceptance for Visa Debit is 1 per cent and for American Express is 2.5 per cent, the single surcharge would be 1 per cent as that is the lowest of all payment method options.
This graphic provided by the ACCC explains the rule in further detail.
The ACCC has been given new powers to enforce the ban. The consumer watchdog can investigate complaints relating to excessive payment surcharges, and can issue infringement notices or take court action against businesses who breach the ban.
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