Ban on excessive payment surcharging

New legislation

On 25 February 2016, the Competition and Consumer Amendment (Payment Surcharges) Act 2016 commenced. This Act will form part of the Competition and Consumer Act 2010 (CCA).  Its purpose is to ban excessive payment surcharges.

On 26 May 2016, the RBA published its Standard (RBA Standard) on surcharges by merchants when charging customers for use of their credit/debit card.

Commencement of RBA Standard

The Standard applies to ‘large merchants’ from 1 September 2016.

For all other merchants, from 1 September 2017.

  • ‘large merchant’ is a merchant that meets at least two of the following requirements:
    • - consolidated gross revenue of ≥$25 million;
    • - consolidated gross assets is ≥$12.5 million; or
    • - ≥50 employees.
  • ‘Excessive surcharges’ are where they exceed the permitted surcharge amount in the RBA Standard or regulations.
  • ‘Surcharges’ if they are:
    • - fixed per transaction, cannot exceed 15 cents; and
    • - calculated as a transaction percentage, cannot exceed 0.2% of that transaction.
Effect of new legislation

This new legislation limits the amount businesses can surcharge customers for use of payments methods such as credit and debit cards. The limit will be linked to the direct costs of the payment method such as bank fees and terminal costs.

MasterCard (credit, debit and prepaid), Visa (credit, debit and prepaid), eftpos (debit and prepaid) and American Express cards issued by Australian banks must comply with the RBA Standard.


The ACCC will enforce the ban on excessive payment surcharges from 1 September 2016. The ACCC will also ensure businesses take steps meet legislative requirements.

Post by John Kell 

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