Changes to card payment surcharge rules

On 1 September 2017 the rules are changing for all merchants that surcharge customers who pay by card.

As a merchant, you retain the right to charge an extra fee (surcharge) to customers paying by card. Under the new rules this surcharge is limited to the amount it costs you to accept that type of card for that transaction. Essentially, from September you can’t apply a surcharge that is more than it costs you to process the transaction.

The new rules apply to payment surcharges for six card systems – EFTPOS, Debit Mastercard, Mastercard Credit, Visa Debit, Visa Credit and the American Express companion card system.

Complying with the new rules

If you currently apply a surcharge to card payments, you will need to be compliant with the new rules by 1 September 2017. The below steps should help you apply the new rules.

1. Finding your annual ‘Cost of Accepting Card Payments’.

Your annual ‘Cost of Accepting Card Payments’ for each card type will be shown on your monthly payment report issued at the beginning of the following month.

The amount shown is the maximum percentage surcharge you will be able to apply to a customer’s transaction if they pay by card. If you wish to surcharge customers more than this amount, you’ll need to provide proof of how you incurred those additional costs, or potentially face a fine.

The ‘Cost of Accepting Card Payments’ table will take into consideration all fees charged on your main merchant statement.

2. Applying your annual ‘Average Cost of Accepting Card Payments’ as a surcharge.

You should review your surcharge rates once you have received your monthly statement detailing your annual ‘Cost of Accepting Card Payments’.

Here is an example of how you can apply the new surcharging rules.

To make surcharging easier, you may wish to apply just one rate to all card purchases. The new rules stipulate you will need to apply your lowest annual cost of acceptance if you select this option.

In the example above, 0.60% is the lowest ‘annual cost of acceptance’ and the maximum rate you can charge. The rates shown above are examples only – you will need to refer to your monthly statement to find the rates relevant to you.

3. Updating your surcharges.

Once you have reviewed your next monthly statement, it is time to review and update your surcharge rates if they are above your annual ‘Average Cost of Accepting Card Payments’.

Here’s how we can help.

Enable ‘auto-surcharging’ on your Live eftpos device:

We’ve made it easy for you to automatically add a surcharge on your Live eftpos device, depending on the payment card your customer uses. This will save you having to manually work out the correct surcharge to apply.

How to enable surcharging with Live eftpos:

When signing up for Live eftpos make sure you speak to your Relationship Manager about setting up your device with the ability to surcharge your customers.

If you are an existing customer without surcharging setup, you can change your preference by calling 1300 780 788 during business hours (9am-5:30pm Monday-Friday and 10am-4 pm Saturday) or email after hours.

We require your name, business name and terminal ID and we’ll respond to your query the next business day.

Facts about surcharging


Cash is often seen as the cheapest payment method, however there are a number of additional costs such as the time it takes for a shop assistant to count the change when a customer pays by cash. Contactless payments may actually be cheaper for your business to accept due to the speed at which a customer can be served and their purchase processed.

Digital revolution

In the last few years, there has been huge growth in digital technologies such as contactless payment systems.  Customers are increasingly using contactless payment methods such as tap and pay on their mobile devices and wearables. Australia is leading this trend, with the highest number of people who understand and make contactless payments in the world

By removing surcharges, it may help give you an edge over competitors who surcharge customers who pay by card, by providing a more favourable customer experience.

Frequently asked questions

A card payment surcharge is an extra fee charged by a merchant when a customer is paying with credit card, charge card or debit card, to recover the cost of accepting payment by card.

A card payment surcharge is different to a ‘service fee’ or ‘handling fee’ where those fees are applied to all transactions irrespective of form of payment (for example, it covers card, cash and cheque payments).

A merchant who decides to apply a surcharge to a particular type of card payment may not surcharge above their cost of acceptance for that card type.

The Reserve Bank of Australia (RBA) has now clearly defined what costs can be included in the cost of acceptance calculation, and the Australian Consumer and Competition Commission (ACCC) now has monitoring and enforcement powers to ensure that merchants do not excessively surcharge.

These changes apply to all merchants, but only affect those that currently apply or intend to apply a surcharge to accept payment by credit and/or debit card (whether in person, online, over the telephone, or via mail order).

The following card payment schemes are covered by the surcharge changes:

  • Mastercard Debit and Prepaid
  • Mastercard Credit
  • Visa Debit and Prepaid
  • Visa Credit
  • eftpos Debit and Prepaid
  • American Express cards issued by Australian banks.
  • American Express proprietary card system (i.e. not issued by Australian banks)
  • UnionPay
  • JCB
  • Diners Club
  • Discover Card
  • Any other systems not covered in question 4 above.

The ACCC has already begun monitoring surcharging by large merchants (as defined below) from 1 September 2016. A large merchant is one that satisfies two or all of the following:

(a) the consolidated gross revenue of the merchant and its related companies for the financial year ended 30 June 2015 was $25 million or more;

(b) the value of the consolidated gross assets of the merchant and its related companies at 30 June 2015 was $12.5 million or more;

(c) as at 30 June 2015 the merchant and its related companies between them had 50 or more employees (whether full time, part time, casual or employed on any other basis).
All merchants will be monitored by the ACCC from 1 September 2017.

You are permitted to recover the following costs when applying a card payment surcharge:

  • Merchant service fees charged by an acquirer or payment facilitator in relation to a card transaction.
  • Payment terminal rental and maintenance costs paid to the merchant’s acquirer, payment facilitator or payment service provider.
  • Fraud-related chargeback fees paid to the merchant’s acquirer or payment facilitator.
  • Gateway or fraud prevention services fees paid to the merchant’s acquirer, payment facilitator or payment services provider.
  • Cost of insurance for forward delivery risk, incurred by the merchant, where that risk arises because the merchant accepts card transactions. This typically applies to agents (such as travel agents) who pay an external party to insure against the risk that the agent will be liable to a customer for the failure of a principal supplier (such as an airline or hotel) on payments accepted via cards.

A merchant wishing to include additional eligible costs not billed by their acquirer would need to be able to provide invoices, contracts or statements to support their calculation.

Live eftpos will provide you with the cost to accept each of the following card payment types on your monthly statement beginning in June 2017, and the final statement for the Australian tax financial year will provide you your cost for each scheme over the preceding year:

  • Visa Credit
  • Visa Debit and Prepaid
  • Mastercard Credit
  • Mastercard Debit and Prepaid
Things you should know
  1. RFi Group Payments Diary 2015.

The information provided on this page is general in nature and does not constitute advice on you circumstances. You should seek independent legal advice as to how these changes may affect you.

World Mastercard®, Mastercard® and the Mastercard brand mark are registered trademarks, and PayPass is a trademark of Mastercard International Incorporated.

Visa is a registered trademark of Visa Worldwide PTe Limited.

American Express® is a registered trademark of American Express.