New laws have been passed banning excessive credit card surcharging, with the Competition and Consumer Amendment (Payment Surcharges) Bill 2015 soon coming into effect for merchants. Excessive surcharging, as defined by the government, refers to charging consumers more than the transaction-processing cost to the merchant.

The laws passed by Parliament are enforceable for ‘large merchants’ from 1 September 2016 and all other merchants from 1 September 2017.

Large merchants have been defined as a merchant that satisfies two or all of the following:

1. The consolidated gross revenue for the Financial Year ended 30 June 2015 of the Merchant and its Related Bodies Corporate was $25 million or more;

2. The value of the consolidated gross assets at 30 June 2015 of the Merchant and its Related Bodies Corporate was $12.5 million or more;

3. As at 30 June 2015 the Merchant and its Related Bodies Corporate between them had 50 or more employees (whether full time, part time, casual or employed on any other basis);

The Australian Competition and Consumer Commission (ACCC) has been given powers to penalise excessive surcharging and enforce the legislation, ensuring credit card surcharges to consumers represent the acceptance cost of the merchant. Retailers are reminded to adjust their fees accordingly by the implementation dates relevant to their business.

The Australian Retailers Association (ARA) actively advocates for the reduction of excessive surcharging, and is now calling on the RBA to lower costs of all card schemes through the regulation of high-cost payment systems such as Amex and Diner’s Club.