Does your business charge a credit card surcharge for accepting different payment types? This is a fairly hot topic in Australia. The ACCC are cracking down so here’s what you need to know.

I don’t know about you, but I rarely have cash in my wallet these days. Paying with card is so quick and easy. When I come across a business where I need to pay a credit card surcharge, I generally consider that the cost of convenience. However, there was a recent Australian survey which found 69% of consumers get frustrated when they are required to pay a credit card surcharge, and more than half have considered forfeiting the sale because of it.

It’s understandable that businesses need to cover their costs, and the cost of providing these facilities is a cost to a business. If you do apply a surcharge in your business, here’s some things to consider.

Am I allowed to charge a credit card surcharge?

Yes, but it must not be more than what your costs are. For example, if you’re being charged 2.2% by your provider, then your credit card surcharge must not be more than that. So for businesses who are charging a flat rate (say $1 for every transaction), you can come unstuck on low value sales where this will exceed your cost.

What about a service or handling fee?

You cannot bypass the law by instead charging a ‘service’ or ‘handling’ fee on credit card payments. This is still effectively a surcharge and if it’s more than your costs, refer to point 1.

Can I include a credit card surcharge in my prices?

When deciding on the price of your goods and services, consider all the costs involved such as overheads, staff wages, cost of goods, etc. Just like any other operational cost, a credit card surcharge should be considered when determining the best pricing model for your business.

For more information on how a credit card surcharge may affect your business, there is a full breakdown of the regulations on the ACCC website.