Card payment sucharges banned in Australia from 2026

[SeaWolf]

Besides competition (where it exists), what is there to prevent a business dropping their credit card surcharge and replacing it with an administration fee, or processing fee, or similar?

There's regulation around this, called Minimum Total Cost.
Businesses must display the total price of a product or service as a single figure. This price must be the minimum total cost – the lowest amount a customer could pay, including any taxes, duties and unavoidable or pre-selected extra fees. This includes any surcharges or other fees which may apply every day of the week.

Note also the pre-selected extra fee. The business can't add on a "convenience fee" that's supposedly optional but you have to ask for it be removed. If they add it on automatically then it has to be included in the displayed price.
Optional extras must be included in the total price, if the business pre-selects these options for customers. ‘Pre-selected’ means the business will include these options – and charge for them – unless the customer removes them.

In terms of the card networks rules I think they just define it as any extra charge added that is specific to the card. I'm sure their lawyers would make sure the T&Cs wording would be water tight.

 

[Captain Halliday]

There's regulation around this, called Minimum Total Cost.
Businesses must display the total price of a product or service as a single figure. This price must be the minimum total cost – the lowest amount a customer could pay, including any taxes, duties and unavoidable or pre-selected extra fees. This includes any surcharges or other fees which may apply every day of the week.

Note also the pre-selected extra fee. The business can't add on a "convenience fee" that's supposedly optional but you have to ask for it be removed. If they add it on automatically then it has to be included in the displayed price.
Optional extras must be included in the total price, if the business pre-selects these options for customers. ‘Pre-selected’ means the business will include these options – and charge for them – unless the customer removes them.

Agreed.

This is an existing law and yet unpublished surcharges abound.

Like any legislation, it’s effectively useless if not enforced.

 

[SeaWolf]

This is an existing law and yet unpublished surcharges abound.
Like any legislation, it’s effectively useless if not enforced.

That's definitely true, and once the rules change on October 1st I expect we'll see a lot more shenanigans and shonky practices from some businesses. We all need to be proactive, be aware of what we're paying and why and when we see something amiss, report it to the ACCC or your state's Fair Trading agency.

It may feel good to complain about it online, but if we want to see real action taken, we've got to report it to the relevant authority.

 

[HMcM]

Returning to the topic of the thread…

Besides competition (where it exists), what is there to prevent a business dropping their credit card surcharge and replacing it with an administration fee, or processing fee, or similar?

The RBA changes to payment processing rules aren’t the same as legislation that requires “what you see is what you pay”.

While I agree with the minimum cost analysis others have done, the other controlling factor would be the card issuers themselves. That's where the surcharge ban is coming from, not the RBA. If Mastercard found out that someone was trying to be tricky and implementing a "admin fee" for their card payments then they would likely be in breach of contract and able to be cut off from card processing.

 

[lovestotravel]

That's poor.

Grab tea bag from lounge, good selection there.

There is a thread about people taking all the tea bags from Singapore Airlines lounges in SIN...

No surcharge that way either

 

[MooTime]

There is a thread about people taking all the tea bags from Singapore Airlines lounges in SIN...

No surcharge that way either

Nothing wrong with a bit of tea bagging!

 

[stu961]

This is the key. Businesses that hike their prices will still have to compete with those who don't. Right now plenty of businesses are just hiking their prices anyway, this is just the latest excuse. So make sure you shop around folks.

I'm paying $3.70 for my morning coffee (including brownie square) because I shopped around and found the best price. If other cafes hike their prices once the surcharges end, they'll still have to compete with this cafe, which will still probably be cheaper than them even if it does bump its prices. Some of those cafes will probably go under blaming it on the surcharge and interchange changes, but really, it'll have been plain old competition that'll have killed them.

exactly.... good riddance to surcharges... and I would have loved being able to drill down on some of these so called "surcharges" that we have been charged in the past.... up there with "resort fees" charged by some hotels!!

 

[Seat0B]

Imagine spending 1000 velocity points for 250ml of coke

worse value than a toaster!

 

[Seat0B]

I was on a VA flight the other day and asked if there was any herbal tea as I didn't want any caffeine - the flight attendant advised that the complimentary drinks were limited to only black tea / coffee or water then pointed out the menu.

I'm not going to pay $5+surcharge for what would be a 150ml a cup of herbal tea, I may as well just bring a teabag in my carry-on and just ask for hot water

I really resent being charged the same price that people pay for a full service coffee for a tea bag and a mug of water that isn't even really hot enough to take the tea out of the bag! For what they charge, the least they could do is provide proper leaf tea.

For a quite a while, for medical reasons, I could not drink tea or coffee, and when accompanying the family for coffees out, I would often ask for hot water just so I felt social. Whilst most places would give me that at no charge, a few places wanted to charge various amounts from $2-$4 for hot water (plus credit card surcharges). Again, I find that pretty off. I understand they have to pay to heat the water and provide a mug and service, but that is the same for cold water - they have to chill it and provide a glass and sometimes service, although cold water is also often self service. But cold water is free. I guess I could grudgingly understand if it was just me, and I walked in and ordered free hot water and nothing else, but this was one person in a group of 4 , 3 of whom were ordering multiple coffees and all of us ordering muffins etc and they still wanted to sting me all but full price for a hot water. Needless to say, we tended to go to the places that provided it free. Now I am back on the tea and sometimes even coffee, we still avoid those places that wanted to charge me.

 

[lovestotravel]

A friend of mine who runs a few venues...

As I said, higher prices, less rewards

 

[Happy Dude]

Accusing the banks of not being transparent? So the same as the venues that surcharged more than the banks cost. There was plenty that did so they had to bring in laws to stop venues doing that. Or those that just show you a total including some % amount higher than the menu after tapping the card. Pot kettle black. Hopefully your mate's venues would not risk further alienating customers when increasing prices by taking the opportunity to round up prices beyond the current surcharge rate.

 

[transpactraveller]

The merchant fees that banks charge are also being reduced by the RBA, that's what's driven the change in credit card rewards. If the banks could keep charging the same fees they do today, then they wouldn't be dropping any rewards.

So these venue owners are either being dishonest and opportunistic, hoping their customers are ignorant of the changes, or they are ignorant themselves and don't know their bank fees will be going down.

I would assume these venues are being dishonest on purpose, because most of them already surcharged more than the fees cost, and they didn't reduce their prices when they introduced a surcharge.

 

[Happy Dude]

If the banks could keep charging the same fees they do today, then they wouldn't be dropping any rewards.

Or they could accept a bit of a haircut and keep the rewards worthwhile, rather than tossing the toys out of the cot.

More anger needs to be directed to the banks. If enough go back to cash or stop spending or whatever, they'll lose even more. Maybe then bring back the inducements to use cards....

 

[transpactraveller]

Yes, banks in other countries have done just that. Australian banks are the most profitable in the world and charge some of the highest fees in the world. Our Big 4 would be uncompetitive in so many other countries, few customers would ever choose them. But for some reason most Aussies just accept it.