The ACCC Declares War On Excess Card Charges

The ACCC Declares War On Excess Card Charges
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One of my pet hates when I shop is that little notice next to the counter that says the use of credit cards and debit cards will incur extra fees. In many cases, the charges have been far in excess of what the stores actually pay for the transactions and the ACCC has had enough. They are now going after companies and taking them to court for adding what they deem excessive fees. Today, they’ve announced they’re going after car rental firm Europcar after Cruisin Motorhomes was forced to pay $12,600 in fines earlier this month. If you’re taking payments by credit card, or feel you’re being slugged excessively, there are steps you can take.

In a statement, the ACCC alleges Europcar jacked up credit card fees by between 0.18 percentage points to as much as 0.65 percentage points for different cards and over different time periods. This was despite being told by its bank what the fees were. The ACCC has launched legal proceedings with ACCC Chair Rod Sims saying “The ACCC’s action serves as a warning that the ACCC is paying close attention to those businesses who seek to overcharge customers making payments by credit or debit cards”.

This follows action taken against Cruisin Motorhomes last week.

The ACCC announced the focus on excessive charges almost a year ago and has given businesses time to move to compliance with the laws that were changed in September 2016.

When they announced the new rules, the ACCC recommended businesses that set a single surcharge for all payment methods should use the lowest fee and not an average.

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, for Visa Credit is 1.5 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 methods.

(Source: ACCC Excessive payment surcharge ban)

If you run a business and take credit card payments you have a couple of options. Be clear to customers about the charges and only charge what you’re paying – don’t add any margin.

If you choose to have a single surcharge for all payments, it must be the lowest. ACCC Deputy Chair Dr Michael Schaper said “Our advice for businesses wanting to set a single surcharge regardless of the type of card their customers use is it must be the lowest of all the payment methods. You can’t use an average of all payment methods or you will land yourself in trouble”.

Alternately, you can either accept the fees as a cost of doing business and not pass them on to customers or ensure you’ve covered them in the way you price your goods.

For consumers, if you think the fees you’re being charged are excessive, take a picture of the notice with the fees at the store your in (or a screen grab if it’s online) and report the issue.


  • Cheers for the reporting link, we’ve had quite a number of businesses try to get away with charging us 3 – 5% for using VISA, as well as setting multiple percentages for different cards.

    They won’t budge on it being against the law either, it’s “not our problem” according to them.

  • Something to consider with card fees. Go back just 5 years ago, EFTPOS type use was around 30% of all transactions, give or take. Today, its more like 75%, or 90% depending on who you talk to. Point being its 250%-300% what it was.

    So banks are getting that much more from digital transactions than they ever were, just because we pay digitally more. Free money, and more than ever, yet those fees haven’t dropped in the slightest. All it is is a fee to use our own money. The actual cost per transaction is so low they could be charging 0.01% and still come out ahead.

    Add in that theres a serious impact on retailers as well, which always goes unrecognised, and its something that needs to be addressed. As a basic rule, businesses spend around 90% of their turnover to make that money – roughly split as 30% in cost of goods, 30% cost of business (rent, etc), and 30% on staff. Varies around those numbers, but of $1m turnover, theres usually $900k spent to make it.

    If that $1m revenue has a 2% fee attached to paywave, that’s $18k that comes out of that $100k profit, meaning its actually 18% of the businesses profit. When electronic payments were so much lower, it wasn’t an issue, but today it is. For something that’s minimal cost to the bank.

    About time they started looking at these charges in other areas, its a rort that’s been getting worse for years. But they need to look so much further than that.

    • If that $1m revenue has a 2% fee attached to paywave, that’s $18k that comes out of that $100k profit, meaning its actually 18% of the businesses profit. When electronic payments were so much lower, it wasn’t an issue, but today it is. For something that’s minimal cost to the bank.
      That implies that handing and processing cash is free – it’s not. There’s the time taken to handle cash when a customer hands it over (and you get change back). There’s storing the cash securely. There’s the risk of theft. Then there’s the time taken to deposit it at the bank. Etc etc etc

      • Most of those costs are still there regardless. Cash based businesses still bank a couple of times a week, theft insurance is still there, a safe is a one off cost when setting a business up, and it takes no longer or shorter to pay with cash or card.

        Its what happens after that I’m talking about. In a digital world, where the costs have dropped exponentially over time, yet the cost to the business hasn’t. It doesn’t cost a bank 2% to service a payment, it costs well under 0.1%. The volume has driven the costs to the bank down so far that its just free money to them.

        Yet plenty of businesses cite issues like that as one of the reasons they hide income. To us, we don’t see it, but to a business, that other side of the fee is a big thing.

        My work involves black economy stuff, its my job to consider things like this. And its a bigger issue than people think.

        • It shouldn’t cost 2% – these businesses need to shop around. Half that should be achievable for $1M turnover – even less is possible. This has definitely come down, so I disagree with you there. I’m not in the bank’s corner but they provide a service and need to make a profit. It doesn’t cost the cafe in your example 50c more for the syrup if I order a vanilla latte over a standard one but that’s what they’ll charge anyway because they want to make more profit from the add-on. That’s business.

          Businesses might cite this as a reason to hide income but what they’re really saying is “I want to make more profit…because I can”. Cash = opportunity. I also have experience in black economy.

          I agree it’s an expense the consumer doesn’t consider and it is real money but it is cost of doing business in the modern world. I shouldn’t hide money because I have to pay insurance, or an accountant to do the books every year or a lawyer to check over the lease renewal or a million other things that are part of the $900K expenses.

        • Surprisingly a lot of digital transactions are still verified by a person.
          I used to date a girl that did that. Checked transactions from her bank to outside banks.

      • Yeah, they’re different things, just raising the other side of these problem which is that as we use electronic payments more, the number of transactions goes up and hence the number of times these fees get applied goes up. EFTPOS or merchant fees, it doesnt really matter.

        As consumers, we only see the EFTPOS charge, but a business pays that merchant fee. Which is slowly eating their profit as we use cards more and more. Its one of the reasons a lot of places put a minimum EFTPOS transaction in place.

        Consider that our use of electronic payments has tripled in 5 years, both sides become easy profit to the banks for no effort. In most areas, as use increases costs drop accordingly. Instead, banks are turning a bigger and bigger profit, and these are the areas doing a lot of that. And they know it.

    • , EFTPOS type use was around 30% of all transactions, give or take. Today, its more like 75%, or 90%

      That is not true.

      If when you say EFTPOS you included CC transactions (tap and go) then you may be right. But you are saying that we are using our own money and that’s not true. I would say 75% of transactions are probably now tap and go but the majority of those would be on credit cards not eftpos.

      • Yes I was including paywave. Go ask your local coffee shop how many people pay by card these days, and that’s the number I was referring to. Depending on who you ask, that’ll be anywhere from 70% to 90% of all transactions. Slightly out of date data supports somewhere in that range, and increasing. Irrespective of how its broken up by type, which really doesn’t make a lot of difference anyway.

        There are two sides to the transaction. The potential hit on us for paying electronically, which is an electronic fund transfer at the point of sale. EFTPOS in other words. That may or may not be absorbed by your bank. That fee is what this article is about.

        Then you have the issue that most accounts funnel through VISA or MasterCard. Debit cards count here as well by the way, even though its your money. As the money moves from your account to the retailer, it goes via those merchants who take their cut, which is a flat rate generally around 2-2.5%. Some options are cheaper.

        We don’t see that, but the retailers feel it. That’s the extra that I think they also need to be looking into. Its increased 250-300% in the past 5 years, with no corresponding drop in cost. The cost to the banks to provide that service hasn’t increased at the same rate.

  • Is putting a minimum EFTPOS transaction legal? Is it addressed by ACCC? I have seen some places where they have $20.00 minimum transaction to be able to use the credit card or otherwise they’d add $0.50 to the bill. I know they can’t add $0.50 to the bill because ACCC has addressed that part, but not sure about the minimum transaction amount.

    • From the ACCC website –

      Can I set a minimum transaction value in order to use EFTPOS services?

      Yes, businesses are allowed to set a minimum transaction value for the acceptance of EFTPOS cards (or other cards if they wish). They don’t have to offer a card payment option, but they need to comply with the excessive surcharging rules regardless of the cost of the product.

      For example, if a business sets a minimum transaction level for EFTPOS transactions of $10 and also says that transactions under that amount will incur a 50 cent fee for card purchases, then that fee would be considered as being a ‘surcharge’ and need to comply with the surcharging rules.

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