Consumers will no longer be slapped with outrageous surcharges when they purchase items using a credit card come Friday.
New rules, set to come into effect at the start of September, will strip small retailers of their ability to charge excessive flat rates for customers making purchases via EFTPOS.
The rules restrict businesses from making profit from card fees and mean they can only charge what it costs them to accept credit card payments.
New ACCC rules mean consumers will no longer be slapped with outrageous surcharges when they purchase items using a credit card
With the cost of accepting card payments varying widely depending on banks and different businesses, no single surcharge limit can be set.
The move has prompted banks to allude businesses to the costs of accepting credit card and debit payments in percentage terms, the Sydney Morning Herald reports.
Deputy chair of the Australian Competition and Consumer and Commission, Michael Schaper, explained how the cost imposed on consumers could be dramatically affected.
Small retailers will be stripped of their ability to charge excessive flat rates for customers making purchases via EFTPOS
‘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.’
Figures identify retailers would normally pay banks 0.5 per cent of a transactions value for debit card payments, up to 1.5 per cent for Visa and Mastercard, and between 2 and 3 per cent for American Express payments.
The rules restrict businesses from making profit from card fees and mean they can only charge what it costs them to accept credit card payments
The ACCC can issue fines up to $2,500 to sole traders who breach the rules, $12,000 for proprietary limited companies, or $120,000 for an ASX-listed company.
Serious breaches can incur fines of up to $1.3 million from a court.
Small business can still charge flat fees, but Dr Schaper said they needed to ensure surcharges were lower than the cost of accepting payment in percentage terms.
The new rules mirror a ban enforced on big business last September which saw a dramatic decline in credit card fees charged when booking flights online.
With the cost of accepting card payments varying widely depending on banks and different businesses, no single surcharge limit can be set