EFT­POS cost-slug banned at reg­is­ter

Geraldton Guardian - - News - Danni Bloom­field Danni Bloom­field is the se­nior re­gional of­fi­cer with Con­sumer Pro­tec­tion — Midwest Murchi­son Re­gion De­part­ment of Mines, In­dus­try Reg­u­la­tion and Safety. Shop 3, 50-52 Durlacher Street, Ger­ald­ton. Phone 9920 9800. Email danni.bloom­field@dm

If you pay for goods or ser­vices by card, you’ll be pleased to know there’s a ban on ex­ces­sive pay­ment sur­charges which ap­plies to all busi­nesses across Aus­tralia as of Septem­ber 1.

The new law lim­its the amount that a busi­ness can charge cus­tomers for use of pay­ment meth­ods such as EFT­POS (debit and pre­paid), MasterCard (credit, debit and pre­paid), Visa (credit, debit and pre­paid) and Amer­i­can Ex­press cards is­sued by Aus­tralian banks. It came into ef­fect for big busi­nesses last year.

The Aus­tralian Com­pe­ti­tion and Con­sumer Com­mis­sioner has new pow­ers to en­force the ban and will in­ves­ti­gate com­plaints re­lat­ing to ex­ces­sive pay­ment charges.

Small busi­nesses that choose to im­pose pay­ment sur­charges need to en­sure their sur­charge lev­els are com­pli­ant now the ban has started.

Busi­nesses can only pass on to cus­tomers what it costs them to process a pay­ment, such as bank fees and ter­mi­nal costs. For ex­am­ple, if the cost of ac­cep­tance for Visa Credit is one per cent, a busi­ness can only pass on a sur­charge of one per cent to cus­tomers pay­ing with Visa credit cards. In­ter­nal costs can­not be in­cluded in the cal­cu­la­tion.

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 the busi­ness cost of ac­cep­tance for Visa Credit is 1.5 per cent, and for Amer­i­can Ex­press is 2.5 per cent, the sin­gle sur­charge would be 1.5 per cent as that is the low­est of all pay­ment meth­ods.

Fi­nan­cial in­sti­tu­tions were re­quired to send busi­nesses a mer­chant state­ment which clearly sets out the busi­ness’ costs of ac­cep­tance for each pay­ment method. So, small busi­nesses should have re­ceived in­for­ma­tion from their bank in July to help them cal­cu­late in ad­vance ap­pro­pri­ate sur­charges when ac­cept­ing debit and credit cards. Busi­nesses should fol­low up with their bank if they did not re­ceive those state­ments or if they have re­ceived the state­ments but are still un­sure about their cost of ac­cep­tances.

The Re­serve Bank of Aus­tralia in­di­cated as a guide that the costs to mer­chants of ac­cept­ing pay­ment by debit cards is in the or­der of 0.5 per cent, by credit card 1 to 1.5 per cent and for Amer­i­can Ex­press cards about 2 to 3 per cent.

A sur­charge will be con­sid­ered ex­ces­sive where it ex­ceeds the per­mit­ted cost of ac­cep­tance, as de­fined by the RBA.

Pay­ment types not cov­ered by the ban in­clude BPAY, Pay­Pal, Din­ers Club cards, Amer­i­can Ex­press cards is­sued di­rectly by Amer­i­can Ex­press, cash and cheques.

En­forc­ing the ban

The ACCC can is­sue sur­charge in­for­ma­tion no­tices, and these will re­quire a busi­ness to pro­vide ev­i­dence of their costs of pro­cess­ing a pay­ment. If the ACCC has rea­son­able grounds to be­lieve a busi­ness has breached the ban, it can is­sue an in­fringe­ment no­tice or take court ac­tion.

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