From Friday 1 September, small business owners risk being fined thousands of dollars for applying excessive surcharges on credit and debit card payments.
Under the new rules, which have applied to big business since last September, small business owners must not charge any more in surcharges than what it costs them to accept payments made through eftpos, Visa, MasterCard or American Express cards issued by banks.
There is no single figure on what is deemed ‘excessive’ as the exact cost of accepting card payments varies between banks and small business owners.
East & Partners Australian Merchant Payments research shows that the average surcharge applied by businesses with annual turnovers between A$1-5million is 1.58 percent. The research also shows that the majority of businesses either currently apply or are planning to apply a surcharge.
To help businesses figure out what is ‘excessive’ banks have had to tell their business customers what they are being charged to accept credit and debit card payments in percentage terms.
The rule could cause changes for business that charge a flat fee for paying on card.
Taxis are not included in the surcharge ban because they are covered by state laws.