Close this search box.

Receiving Credit Card Payments from Clients? New Requirements Coming Soon

From 1 September 2017, all businesses will be prohibited from charging excessive payment surcharges for certain payment methods including Visa and MasterCard credit and debit cards, EFTPOS and the American Express Companion Card system.



  1. Introduction
  2. Background
  3. How Should You Prepare?
  4. Included and Excluded Payment Types
  5. Cost of Acceptance
  6. Charging Handling Fees or Processing Fees
  7. Reviewing Your Surcharge Level
  8. The ACCC’s Enforcement Powers and Penalties
  9. Contact Us



Under the new law, businesses can only pass on to the customer what it costs them to process a payment (i.e. the cost of acceptance).  In most cases, the permissible level a business can charge a customer for processing payments will be no greater than the amount the business has been charged by their bank.



The Competition and Consumer Amendment (Payment Surcharges) Act 2016 (the Act) commenced on 25 February 2016. The Act inserts a new part into the Competition and Consumer Act 2010 (CCA) which bans excessive payment surcharges.

On 26 May 2016, the Reserve Bank of Australia (RBA) published its Standard relating to surcharges charged by businesses when charging customers for the use of a credit or debit card. Surcharges are deemed excessive where they exceed the permitted surcharge amount in the standard or the Act.

The Australian Competition and Consumer Commission (ACCC) has been given the power to enforce the ban.


How Should You Prepare?

Where a business decides it wishes to have a payment surcharge, it should take the necessary steps in order to prepare for the new regime. Download our Readiness Checklist for a step by step guide on how you can prepare your business for the changes.


Included and Excluded Payment Types

The Standard sets out what payment types are covered by the ban.

Included payment types subject to the ban:

  • MasterCard (credit, debit and prepaid);
  • Visa (credit, debit and prepaid); and
  • American Express “companion cards” (American Express cards issued by a bank, rather than directly through American Express).


Excluded payment types:

  • BPAY;
  • PayPal;
  • Diners Club cards;
  • American Express cards issued directly by American Express;
  • Cash; and
  • Cheques.


Businesses are still allowed to apply surcharges to payments using the aforementioned excluded payment types if they wish. These payment surcharges are not subject to the ban, and therefore the ACCC cannot take action if they are excessive. 


Cost of Acceptance

Where businesses choose to impose a payment surcharge on a payment method covered by the ban, the amount of the surcharge must not exceed the cost of acceptance for that payment method.

The costs of acceptance are calculated over a 12-month period and are typically expressed as a percentage of the total value of the card transaction. Banks and payment facilitators are required to clearly set out average service fee for each card scheme in their monthly statements provided to businesses as of 1 June 2017.

Businesses can also choose to pass on additional permissible costs, but are required to calculate the permitted surcharge themselves. It should be noted these additional permissible costs are required to be verified by contracts, statements or invoices. Businesses cannot include any of their own internal costs when calculating their surcharges (for example, labour or electricity costs).

The Cost of Acceptance = Service Fees plus Permissible Costs


Charging Handling Fees or Processing Fees

The new ban does not prevent a business from charging fees that are genuinely unrelated to payment methods. However, businesses will still need to comply with their existing obligations under the Australian Consumer Laws such as including all components that make up the price of the goods or services in the advertised price, where they can be quantified. Businesses will also need to ensure they do not mislead consumers and they need to continue to provide adequate disclosure and be clear about the nature of the handling or processing fee and the circumstances in which it applies.

A business is not able to by-pass the new ban by introducing what is in effect a payment surcharge but calling it something else such as a booking fee. To be clear, where a business imposes a fee, however, it is described that is payable on some payment methods but not others, then it is likely to be a payment surcharge. The ban will apply and the surcharge amount will be limited to the costs for accepting that payment method.


Reviewing Your Surcharge Levels

Businesses are required to review the level of any surcharge once a year.

The costs of acceptance for some payment methods may fluctuate from month to month based on the mix of cards presented, and this will be shown on the monthly statements. Businesses may wish to reset the surcharge levels frequently based on these monthly statements. However, the Standard has been designed so that businesses will be able to analyse the payment costs once a year, using the annual statement and any other applicable costs, and set the surcharge for the next year based on this information.


The ACCC’s Enforcement Powers and Penalties for Breaches

The ACCC has the power to issue ‘surcharge information notices’ to businesses and banks, requiring them to provide evidence of the actual costs of processing a payment, in comparison to the surcharges they are applying, in order to determine whether or not their surcharges exceed the permitted level.

If the ACCC has reasonable grounds to believe that a business has breached the ban, it can issue an infringement notice or take court action against the business, seeking pecuniary penalties of up to $233,100 for an individual or up to $1.1 million for a body corporate per contravention.

For further information on the changes to surcharge payments and how this may affect your business, please contact us.

Check our our Compliance Portal

Subscribe to our Newsletter

Contact Us