The Australian Competition and Consumer Commission will begin enforcing the ban on excessive surcharges for large merchants on 1 September 2016.

Earlier today, the Reserve Bank of Australia Payments System Board (PSB) published its Standard which relates to surcharges by merchants when charging customers for the use of a credit or debit card. Surcharges will be excessive where they exceed the permitted cost of acceptance, as defined in the Standard.

“In short, the new provisions will limit the amount businesses can surcharge customers for use of payment methods such as most credit and debit cards. The limit will be linked to the direct costs of the payment method such as bank fees and terminal costs,” ACCC Chairman Rod Sims said.

The Standard defines what businesses are able to include in setting a surcharge and sets out a two-staged implementation, with the ban commencing on 1 September 2016 for ‘large merchants’ and 1 September 2017 for all other merchants.

The Standard defines a ‘large merchant’ to be one that satisfies at least two of the following requirements: it has a consolidated gross revenue of $25 million or more, the value of its consolidated gross assets is $12.5 million or more, or it employs 50 or more employees.

The Standard will apply to six card systems – EFTPOS, Debit MasterCard, MasterCard Credit, Visa Debit, Visa Credit and American Express cards issued by Australian banks.

“The ACCC is finalising online guidance material for consumers and businesses, which will provide further information on the ACCC’s enforcement role, what businesses need to do in order to comply, and how consumers can make complaints if they believe a business has charged a payment surcharge that is excessive,” Mr Sims said.

“We will focus on education and awareness in the early stages but won't turn a blind eye to possible breaches, particularly for those large businesses clearly on notice of these changes.”

The ban has no effect on businesses that choose not to impose a payment surcharge, such as the many businesses in Australia that incorporate payment system costs into their overall prices.

Material on the RBA’s website provides detailed information for businesses about the Standard, including how businesses can identify and quantify those costs that can be passed on to a consumer as a surcharge.

The Standard is available at (link is external) 


The new surcharging law arose out of a recommendation in the Report of the Financial System Inquiry (FSI) which had the objective of improving the efficiency and effectiveness of price signals and reducing the potential for cross-subsidisation between customer groups and merchant groups. The FSI received more than 5,000 submissions related to credit card surcharges, most of which called for surcharges to be banned.

The Competition and Consumer Amendment (Payment Surcharges) Bill 2015 was introduced into the House of Representatives on 3 December 2015. It was passed by Parliament on 22 February 2016 and received Royal Assent on 25 February 2016.

Nothing in the Standard alters the existing obligations of businesses to comply with the provisions of the Australian Consumer Law, as set out in the Competition and Consumer Act 2010, which deal with false and misleading representations about the price of goods or services.