New Card Surcharge Rules as of Tomorrow (September 1st)

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ACCC

• 

  Sage on 31/08/2017 - 20:07

  How about minimum spend amounts though, it's basically the same as a surcharge.

  • 

    Marrk on 31/08/2017 - 20:12

    Businesses with signs like 50c surcharge on transactions under $10 can no longer do this. Not sure whether the ACCC can do anything about minimum spend signs - though customers can choose to vote with their wallets and go elsewhere.

    • 

      [Deactivated] on 31/08/2017 - 21:43

      +2

      Did that today, felt like some good old British candy so I walked into my nearest store, saw the $5 minimum spend sign and walked straight out.

    • 

      shoppe on 10/12/2017 - 00:40

      Businesses have a right to decide what form of payment they accept.

      For example, if you buy a house, the seller has the right to state that they won't accept a cash payment. (Try paying for a $650,000 house with 65,000 $100 notes.)

      Minimum spend signs are legal (it's the opposite of my example above). This time you must pay in cash for a small transaction amount. But now if they do accept to allow you to pay via credit card, they can only charge you what it costs them.

      If you think there's a problem with minimum spend sign, then go to your bank and ask for a $20 house loan (haha). Don't need a loan? Go to a wholesalers/manufacturer who have a minimum order quantity of 1000, and try telling them you like to order only one.

• 

  DogGunn on 31/08/2017 - 20:17

  I think you've misunderstood the rule. It's simply that businesses cannot charge more than what they are charged.
  This means if there is a flat fee of 50c (unlikely) to take card, then they are permitted to charge 50c.

  eftpos (non-Visa/MC debit cards) for instance can have a flat fee of around 15c-40c depending on how much turnover a business does. It wouldn't be unreasonable for them under these rules to charge that.

  Personal preference though, I would rather the fee be built into the price of everything else.

  • 

    Marrk on 31/08/2017 - 21:31

    That's what I said in my post? They are allowed to pass on the cost of exactly what they are paying.

    • 

      DogGunn on 31/08/2017 - 23:26

      I mean, your opening line says:

      If you visit a store tomorrow that has a set card surcharge (e.g. 50c), it is now illegal for them to do this with most cards.

      It's not illegal for them to charge 50c if they get charged 50c to take cards.

      • 

        Marrk on 01/09/2017 - 06:27

        You are completely ignoring the second paragraph.. Most cards charge between 1% - 3% of the transaction, not a set fee of 50c.

      • 

        whooah1979 on 01/09/2017 - 06:36

        @Marrk:

        Most cards charge between 1% - 3% of the transaction, not a set fee of 50c.

        the accc is forcing extra overhead on to businesses without thinking. the businesses may now have to check each and every card before taking out the calculator to work out how much fees they can charge.

    • 

      whooah1979 on 01/09/2017 - 06:38

      They are allowed to pass on the cost of exactly what they are paying.

      what the bank charges the business isn't what it costs the business to process the transaction.

• 

  Almost Banned on 31/08/2017 - 23:25

  I think the bigger question is whether the ACCC should be deciding what services or items businesses are allowed to levy a profit margin on.
  As a consumer I am all for limiting surcharges.
  As a libertarian capitalist I am concerned that if the ACCC is willing to prohibit profit margins on payment, then they can equally limit margins added to other things.
  For example, why can car yards charge above cost on car finance? If they offer it as a form of payment, surely they should be limited to charging only what the bank charges them?
  Why isn't the same true for store cards? If Myer accepts Myer cards as payment, why aren't they limited to only passing on the charge their financiers charge?

  • 

    eclaw on 01/09/2017 - 11:22

    If a customer is willing to pay for it, a business can charge for it = healthy capitalism.

    If the customer is forced to pay for it (lack of choice, no regulation etc etc); a business can charge heaps for it = not good

  • 

    shoppe on 09/12/2017 - 22:12

    The ACCC have ruled that businesses are not allowed to make a profit on accepting a payment.
    A car yard offering finance, or a store offering credit via a store card are both offering a service. They can charge for that service usually via a transaction charge and or a interest rate.

    • 

      Almost Banned on 09/12/2017 - 22:20

      +1

      Providing card readers and the linked banking facility isn't providing a service?
      Car finance is usually provided by third parties. It is not provided by the car yard.
      Same is often true of store cards.
      Besides, the distinction remains arbitrary. If the ACCC is willing to intrude upon the things on which business can charge a profit margin, there is no reason in principle why they would just limit it to card fees. Would businesses also be prohibited from levying a fee on accepting cheques?

      • 

        shoppe on 09/12/2017 - 23:03

        Yes, providing cards readers and linking the bank facility is providing a service, and thus the bank generally do charge for this.

        Any third party that provides a service such as finance can charge for this. The card yard or store is passing on the cost of the third party finance to you, and will also generally get a 'customer finding fee' (call it what you want, maybe you prefer an 'application processing fee'). The car yard/store have provided a service of finance via a third party, and are entitled to charge a fee. This fee can be a set payment or maybe an ongoing charge eg. 2% for life of loan.

        Businesses can pass on the cost of processing a cheque.

• 

  Gunther on 31/08/2017 - 23:32

  +2

  How do you know what the fee is? There is no transparency int he process.

  It could be 10cents yet they charge you 50cents.

  • 

    Xastros on 01/09/2017 - 04:52

    Bank advises them their costs for that type of card. Bank also provides them a letter on how much they can charge. It is very clear. Customer can't find out though.

    • 

      Gunther on 01/09/2017 - 16:12

      So the ones paying the cost cant actually confirm how much it is?

      Makes sense…NOT

      • 

        Xastros on 02/09/2017 - 10:59

        It is a bit complex the cost structure that I can't be bothered explaining but the law basically works in the consumers favour. The cost is different for every business. Even if they displayed the average cost for you to see, you probably wouldn't believe them.

        I can tell you that most businesses already do not charge more than it cost them to process the transaction. Most small businesses I see charge 0.7% for MC/Visa and 2% for AMEX/Diners. This is about right or slighty less than it costs them.

        The offenders are the flat fee $0.50 for under $5 for debit card transactions. Or those that say 1.5% or 2% for MC/Visa. Most businesses are not ripping you off already.

      • 

        shoppe on 09/12/2017 - 23:37

        You should receive a receipt. It should list the processing charge.

        If your not told the cost of a transaction charge via credit card or eftpos etc. before confirming the transaction. You can ask for the transaction to be voided/refunded. You could then pay by cash. They cannot charge to accept cash, but they don't have to accept payment in coins for an amount greater than the law states.

        Online businesses that don't accept cash must inform you of all costs before 'checking out'. They may show a set amount, a fixed percentage, or a maximum amount/percentage.

• 

  whooah1979 on 01/09/2017 - 06:29

  this a silly law. 1.5% or $0.50 per transaction charged by the banks isn't what it costs the business to process the transaction.

  • 

    Marrk on 01/09/2017 - 08:30

    You can say that about anything in business though - presuming that you are talking about the time to process the transaction, electricity etc. Businesses need to be willing to absorb fees like this to an extent - Not accepting cards ultimately means less business coming through the door.

    • 

      whooah1979 on 01/09/2017 - 09:33

      Businesses need to be willing to absorb fees like this to an extent

      This never happens. The consumers will always end up paying one way or the other.

  • 

    Xastros on 02/09/2017 - 11:03

    If you pay by AMEX/Diners or premium cards like black cards etc, it likely costs the business more than 1.5%

• 

  whooah1979 on 01/09/2017 - 09:32

  up

• 

  bonezAU on 01/09/2017 - 09:56

  +3

  If anyone is interested, I asked a terminal provider which I won't name a while back for pricing based on a new business that is going to intially be putting $10k a month through it. This is what I got (all prices are ex GST):

  Standard Credit Visa or MasterCard
  0.83%

  Premium/Commercial Visa or MasterCard
  1.65%

  International Visa or MasterCard
  2.23%

  Visa or MasterCard Scheme Debit
  $0.25

  MasterCard Micropayments <$15
  $0.10

  EFTPOS Debit >$15
  $0.20

  EFTPOS Debit <$15
  $0.15

  EFTPOS Debit with Cash-Out
  $0

  • 

    [Deactivated] on 01/09/2017 - 13:37

    Thank you for taking the time to share your insights. Our team is sometimes shocked to see how much these charges vary between each business.

    These recent changes initially appear to be putting cards directly issued by AMEX/Diners Club in a unique position. It will be interesting to see how this pans out for loyalty programs/incentives to their customers.

  • 

    Xastros on 02/09/2017 - 11:02

    +1

    Keep in mind this is not uniform for all business. There is a big variance depending on how many transactions they put through a month and how they negotiated with their bank. Those % also do not include other costs like terminal rental, monthly service charge etc that the bank charges them which they are allowed to build into the surcharge.

    The merchant you talked about is quite typical yet most only charge 0.7% for you to use Visa/MC. Most businesses are already not gauging consumers.

• 

  m_tank on 01/09/2017 - 18:06

  Anyone know if this applies to Jetstar when booking flights originating from o/s? E.g. If you book a one way DPS to MEL they have been charging a different surcharge than MEL to DPS. Is there a loophole?

  • 

    bonezAU on 04/09/2017 - 10:04

    +1

    It's not a loophole as such, Jetstar also operates in countries outside Australia, so they aren't bound by our laws there in that situation.
    If you book a one way flight from DPS to anywhere, your card will be charged in Indonesian Rupiah (plus the $8.50 "service fee") and it will be billed by a Jetstar entity operating as an Indonesian company. That's the loophole, I guess, if you want to call it that. This also means if you use an Australian credit card that does charge forex fees, you'll be charged the fee by the issuing bank.