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DEFT still charging 1.5% - is that still allowed?

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I emailed DEFT today to clarify the DEFT charges of 1.5% for Visa and 3.3% for AMEX and pointed out that the ACC has thoughts on cc charges . DEFT's answer is below. I still am not sure that DEFT is charging what the cc company is charging them, or if they are marking up and if so is that 'allowed' or are they pulling a swifty? :

"In regards to the regulations, DEFT has been cleared with the ACCC and the new act. If you look at the website underCredit, debit & prepaid card surcharges you can see under the ‘typical surcharge costs’ section that the average cost of acceptance is 1-1.5%.

As DEFT is not a merchant, it is a ‘payment facilitator’ that supports a range of payment channels; one of these is card payments however a biller is a merchant. To avoid this charge however, you have the other payment options provided if applicable".
 

trippin_the_rift

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I predict a new wave of 'payment facilitators' will emerge over the coming months... and merchants renegotiating deals with the bank. If the bank charges a merchant 2.5% and rebates the merchant a 1.5% each year when meeting certain thresholds then it skirts entirely around the rules.

Nearly 15 years after all this garbage came into effect it still in no way benefits consumers or encourages society to go cashless.

Please everyone - stop spending money on any merchant who surcharges.

In fact, my favourite ice cream store in Malaysia gives 20% discount for using Amex. 0% discount on Cash, Visa or any other payment method.
 
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I got a reply from my enquiry to the ACC about DEFT, and it is as @trippin_the_rift stated:

Thank you for writing to us about DEFT Payment Systems. We have recorded the details of your report.

The Reserve Bank of Australia (RBA) decides what payment types are covered by the ban.

Covered payment types are:

  • Eftpos (debit and prepaid)
  • MasterCard (credit, debit and prepaid)
  • Visa (credit, debit and prepaid)
  • American Express “companion cards” (American Express cards issued through an Australian financial service provider, rather than directly through American Express).
The payment types that are not covered by the ban include: BPAY, PayPal, Diners Club cards, UnionPay, American Express cards issued directly by American Express, cash and cheques.

Services such as BPay and PayPal are not merchants, and are intermediary payment facilitators and this is why they are not covered by the ban.

As this is the case, it is unlikely that DEFT Payment Systems would be captured by the new standard.

We have recorded your report
 

Scr77

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/sarcastic hat

That’s great news. Now my business can received payments via my wife’s payment facilitating company and charge whatever she likes.

/sarcastic hat off

Well done RBA.
 

Plutonus

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This seems odd to me. Hasn't the consumer entered into an agreement with DEFT for them to provide a service to the consumer, and DEFT are the ones imposing a surcharge on credit card payments?

Just because the service DEFT provides is that it forwards money to someone else to pay bills doesn't seem all that relevant. I can't see how DEFT is similar to PayPal or BPAY in respect of payment surcharges.

The law:

payment surcharge means:

(a) an amount charged, in addition to the price of goods or services, for processing payment for the goods or services; or

(b) an amount (however described) charged for using one payment method rather than another.


55B Payment surcharges must not be excessive

(1) A corporation must not, in trade or commerce, charge a payment surcharge that is excessive.

(2) A payment surcharge is excessive if:

(a) the surcharge is for a kind of payment covered by:

(i) a Reserve Bank standard; or

(ii) regulations made for the purposes of this subparagraph; and

(b) the amount of the surcharge exceeds the permitted surcharge referred to in the Reserve Bank standard or the regulations.
Surely DEFT is charging a payment surcharge because it is providing you with a service, and it charges you an amount for processing payment for said service.
 

big_RED

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I'd also love for DEFT to be legally bound to these new rules for lower surcharges. Or at least allow PayPal for a 0% fee.
They are just raking in the money otherwise!!
 
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I did have an EBP acct but I so often found them unreliable and unresponsive with such largish sums of $ that were not paid on time that I cancelled it.

@big_RED, you'll find a thread here on ebp I suspect. Many people seem to have made it work, no luck for me through.
 
Last edited:

albyd

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While EBP has the ‘bill payment’ metaphor and is therefore not the most intuitive site, I’ve been using it for some time to make payments. This is a good alternative.

Schemes should be able to negotiate better merchant fees not like they’re tiny merchants.
 

albyd

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Confirming this is the company you're referring to?
Home - Easy Bill Pay

Doesn't look too bad. Thanks for the heads up.
That’s the one. I find the bill payment metaphor a bit laboured but many customers may use it to pay recurring bills. I I tend to use it for ad hoc bills as the value of my bills differs over time so I don’t use the scheduling features. Does the job efficiently otherwise. Hope it can keep going.
 

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