Small businesses warned: Check your card payment surcharges or risk penalties

The Australian Competition and Consumer Commission (ACCC) is reminding small businesses to take a good look at the card payment surcharges they’re passing on to customers — and make sure they’re playing by the rules.

The watchdog says businesses must be upfront about any card surcharges before a customer pays, and can only charge what it actually costs them to process that payment. If you’re charging more than it costs, or hiding the surcharge until the end, you could find yourself in hot water.

“It’s really important for small businesses to understand their obligations and be clear with customers about any extra charges,” ACCC Deputy Chair Mick Keogh said. “Overcharging can not only breach the law, but it could also cost you customers.”

What you need to do to stay compliant

Under Australian Consumer Law, businesses must not mislead customers about the total price they’ll pay. At the same time, the Competition and Consumer Act bans excessive card surcharges. This means you can’t slap on a fee that’s higher than what it actually costs you to accept a card payment.

For example, if your cost of accepting a Visa card is 1 per cent, you can only add a surcharge of up to 1 per cent when customers pay with Visa. No more.

The ACCC has launched a fresh education and compliance campaign to help businesses, particularly small operators, get it right. They’re rolling out new advertising, updated guides, and working closely with industry groups to spread the word.

The watchdog says it will also be keeping a close eye on businesses to make sure they’re following the rules — and will take action where needed.

Why getting it right matters

The ACCC understands that running a small business means juggling a lot of information and regulations. But getting your payment surcharges wrong can have serious consequences: not just legal trouble, but lost customer trust.

If you’re not sure what your actual card processing costs are, it’s a good idea to talk to your bank, payment facilitator, accountant or business adviser. They can help you figure out your true ‘cost of acceptance’ and make sure your surcharges are spot on.

There’s also more guidance available on the ACCC website if you want to double-check your setup.

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