Law Changes To Payment Surcharges
Laws are recently been put into place by the Reserve Bank of Australia (RBA) to ensure merchants have the right to surcharge for payment (credit card fees) while also ensuring that customers are not surcharged excessively. Sailing Whitsundays, which by definition of the RBA, is considered to be a small business, and has to abide by the new laws effective in September 2017.
The new laws are put into place to ensure that merchants are still able to cover costs that are incurred when they accept credit card payments from customers, but also so that customers are not exploited and are not overpaying. This means that merchants will only be able to charge fees that are reflective of fees they are in turn charged by the bank or payment provider. Credit card fees as well as debit cards are covered under the same umbrella and fees are applicable to both.
While large merchants have to change their payment surcharges starting September 2016, small merchants have until 2017 to amend the way they navigate payment surcharges. When the laws come into effect, they will only be able to charge a client as much as the individual credit card fee charges. For example, if your card incurs a .08% credit card free, a merchant will only be able to charge you 0.08%. Alternatively, if your credit card incurs higher fees, with a card such as American Express, which might charge as much as 3% the retailer or merchant will have to charge that higher credit card fee of 3% for that particular transaction.
If a business decides to use one fee for any and all transactions despite their origin, they must use the lowest fee possible as so not to over change any customer for overage fees.The result is that no consumer will pay over the lowest fee offered by any payment provider. However, most provider will likely charge on a card by card basis to ensure their costs are covered.
Bottom line is that merchants charge credit card fees to the customers to ensure their own costs are covered, not to make money. Customers need to keep in mind merchants are charged for each and every credit card payment, and need to cover those costs for their own financial purposes. As is, Sailing Whitsundays has a policy to charge all clients 2.5% in credit card fees, which cover costs incurred by accepting the fee, as well as things such as gateway fees paid to payment service provider, cost of fraud prevention, terminal costs paid to the provider and other compulsory merchant fees.
The RBA states that "merchants will retain the right to impose cost-based surcharge on card payments, but any surcharge will be limited to the amount of the costs the merchant to accept that type of card for that transaction." Simply put, we as a merchant are only charging you, the customer, what we are in turn being charged by the banks for accepting the charges of your card.
Accurate reports will be sent out by banks and payment providers for ensure merchants do not impose surcharges in excess of actual payment posts. These reports leave no room for error as they will provide exact percentages.
If you do believe you have been overcharged with surcharges, you can reach out to the Australian Competition and Consumer Commission (ACCC). The ACCC has investigative capabilities and enforcement powers over possible excessive surcharging cases.