Card payment sucharges banned in Australia from 2026

[albyd]

Yes, I recall that happening and they are now around 5% (Cabcharge) and higher as per my Didi observation above.

Still higher than the actual cost of acceptance though, so I don't see why they shouldn't be brought into line at a federal level.

Hasn’t anyone told them about square? Can process everything including the dreaded Amex at 1.9%, I can imagine a large merchant can negotiate better terms than that if they really want to (guess they don’t care with a cost plus system). Mobile eftpos s the norm not the exception anymore.

 

[Aeryn]

The really large retailers like Woollies and Coles pay a lot less than 1.9% which is why they dont pass on any surcharges to customers and just build the tony fees into their price. Our largest retailers would incur much greater costs for banking cash with there being a monopoly on armoured vehicels these days.

Whilst a small retailer may send a poor employee walking to the bank with the days takings, Coles/Woollies use secure transport for supply of cash and deposit of cash takings.

 

[LondonAussie]

Quite likely, and would probably also have a start date set a few years into the future.

As an example, the equivalent EU legislation (an amendment to PSD2 regulations) was passed in 2016 for a card surcharging ban starting January 2018.... yes Australia's at least 10 years behind!
This is also the current UK law (one of many EU laws that the UK kept post-Brexit).

Not to mention surcharges weren’t as ingrained in the UK before they were banned courtesy of the EU. They were common on airlines and taxis, and amusingly when paying for government services, and buying concert tickets etc, but they weren’t that common at shops and cafes like they are in Australia.

So this would be a much bigger change for most Australian businesses who’ve all become addicted to surcharging.

The EU nipped this in the bud 10 years ago before it got out of control. So yes, I feel like Australia let it go on for too long and is now trying to play catch-up.

 

[Mr_Orange]

So this would be a much bigger change for most Australian businesses who’ve all become addicted to surcharging.

They are only addicted since the RBA signalled to businesses, via the excessive surcharging ban, that surcharging was OK. Before that ban came in, far fewer, in fact a fairly tiny minority, of businesses levied surcharges. Since the ban, surcharging has exploded. Vodafone and Linkt being examples of two large businesses who introduced surcharging after the ban.

 

[Zero]

Interesting that the ACCC got Hyatt to fix a surcharging issue

Hyatt changes card surcharge practices as ACCC compliance monitoring continues

Hyatt hotels in Australia have changed their card payment surcharging practices, following an ACCC investigation. After receiving reports from consumers, the ACCC investigated Hyatt Regency Sydney, and engaged with the regional group, Hyatt Hotels Corporation, about card payment surcharges.

www.accc.gov.au

So Hyatt's new policy is

Credit Card and mobile wallet payments incur a merchant service fee of 1.7% in addition to the total amount payable. No surcharge applies to debit card or EFTPOS payments when a card is inserted into the terminal.

Appears that they were previously charging the 1.7% when inserting the card too.

Unclear whether they previously had any surcharge-free payment methods (for example cash or bank transfer).

No fines and probably no attempt to make them refund affected people (I assume pretty much everyone who has stayed in the past decade) so no incentive for other hotel chains to change anything

 

[Waddygib]

Hasn’t anyone told them about square? Can process everything including the dreaded Amex at 1.9%, I can imagine a large merchant can negotiate better terms than that if they really want to (guess they don’t care with a cost plus system). Mobile eftpos s the norm not the exception anymore.

It might be Square won't do it (and certainly not at their rack rate) because it feels like a high risk industry from an acquiring point of view; I'd suspect most of us can name (or have been ourselves) on the receiving end of disputable charges and/or outright fraud. Any acquirer would want a lot more revenue to fund dealing with all that, let alone having to cough up themselves for a lot of chargebacks.

 

[oz_mark]

Hasn’t anyone told them about square? Can process everything including the dreaded Amex at 1.9%, I can imagine a large merchant can negotiate better terms than that if they really want to (guess they don’t care with a cost plus system). Mobile eftpos s the norm not the exception anymore.

State rules vary, but generally the machine they use to process payments has to be integrated with the meter.

 

[CaptJCool]

It might be Square won't do it (and certainly not at their rack rate) because it feels like a high risk industry from an acquiring point of view; I'd suspect most of us can name (or have been ourselves) on the receiving end of disputable charges and/or outright fraud. Any acquirer would want a lot more revenue to fund dealing with all that, let alone having to cough up themselves for a lot of chargebacks.

Merchant Interchange | Mastercard Australia

Mastercard interchange balance the benefits and costs of electronic payments. Learn more about the benefits of interchange fees & rates, it delivers to all parties.

www.mastercard.com.au

Every year, banks write off 2-4% of credit card balances as losses – a cost that would sit with retailers without interchange

The priority list of which merchants pay what fees is on that page too

 

[Mr_Orange]

Merchant Interchange | Mastercard Australia

Mastercard interchange balance the benefits and costs of electronic payments. Learn more about the benefits of interchange fees & rates, it delivers to all parties.

www.mastercard.com.au

Every year, banks write off 2-4% of credit card balances as losses – a cost that would sit with retailers without interchange

The priority list of which merchants pay what fees is on that page too

And there it is:

Business benefits in many ways as a result of interchange including reducing the significant costs associated with counting, safeguarding and transporting cash and limiting the losses that occur when cash received is lost or stolen.

Next time a business says, cash doesn't cost them anything in an effort to justify surcharging, refer them to the above.

 

[MELso]

And there it is:


Next time a business says, cash doesn't cost them anything in an effort to justify surcharging, refer them to the above.

It's one of the great ironies/perversities of Australia permitting surcharging that the most expensive means of payment for business - payment by cash, with all of the attendant handling costs - is perceived to be the cheapest form of payment as it's 'free'...

 

[Waddygib]

Merchant Interchange | Mastercard Australia

Mastercard interchange balance the benefits and costs of electronic payments. Learn more about the benefits of interchange fees & rates, it delivers to all parties.

www.mastercard.com.au

Every year, banks write off 2-4% of credit card balances as losses – a cost that would sit with retailers without interchange

The priority list of which merchants pay what fees is on that page too

Sorry mate, not sure what you're getting at. Square isn't an issuer and wouldn't be on the hook for defaults. They get revenue by taking a snip of the discount rate, the rest of which is sent off to the issuer (and a tiny amount to the network, like mastercard). Under the network rules, probably Square is on the hook for fraudulent spend if they are the acquirer (though I know it is really complicated so this may not be wrong).

Square is probably getting a tiny fraction of the 1.9% (or whatever it is) and if fraud losses on taxis were even 10bp, it might not be worth it for them.

 

[transpactraveller]

At a restaurant last weekend, card surcharge was 1.9% and they had a 2% discount for paying by cash. So realistically that made their card surcharge 3.9%. Sneaky.

I assume they don't report the cash as income and avoid the tax on it? Otherwise I don't know why they would prefer it with all the other handling costs.

 

[dajop]

I paid cash. I assume they don't report it as income and avoid the tax on it. Otherwise I don't know why they would prefer it with all the other handling costs.

Bingo!

 

[CaptJCool]

At a restaurant last weekend, card surcharge was 1.9% and they had a 2% discount for paying by cash (told to me verbally, not written anywhere I could see).

So there was no way to pay the price on the menu, it was always going to be more than the printed prices by card, or less by cash.

I paid cash. I assume they don't report it as income and avoid the tax on it. Otherwise I don't know why they would prefer it with all the other handling costs.

You’d be surprised

The ATO obtains all the credit card merchant data AND can calculate a likely “missing” cash component. That’s of course not necessarily what happens in reality

Some suppliers LIKE to be paid COD. Cash is handy to pay as the goods are delivered

 

[kamchatsky]

At a restaurant last weekend, card surcharge was 1.9% and they had a 2% discount for paying by cash. So realistically that made their card surcharge 3.9%. Sneaky.

I assume they don't report the cash as income and avoid the tax on it? Otherwise I don't know why they would prefer it with all the other handling costs.

Quite a number of restaurants gave me 5% discount when I pay cash. Needless to say I always pay in cash in those places.