Advice to small business.

The ACCC is urging small business owners to start preparing for the ban on excessive payment surcharges that take effect on September 1, 2017.

The new law limits the amount a small business can charge customers for use of payment methods such as EFTPOS (debit and prepaid), MasterCard (credit, debit and prepaid), Visa (credit, debit and prepaid) and American Express cards issued by Australian banks. The changes were applied to large businesses last year.

“Small businesses that choose to impose payment surcharges should review their surcharge levels to ensure they are compliant when the ban starts,” ACCC deputy chair Dr Michael Schaper said.

“Businesses can only pass on to customers what it costs them to process a payment such as bank fees and terminal costs. For example, if your cost of acceptance for Visa Credit is 1% you can only surcharge 1% on Visa credit card payments onto your customers.”

Passing on the cost of processing debit and credit card payments is not mandatory for businesses and the ban has no effect on those that do not impose a payment surcharge.

Small businesses will shortly be receiving information from their bank, which will help them to calculate appropriate surcharges when accepting debit and credit cards. The ACCC has also published a fact sheet to assist business owners understand their obligations.

“Banks are required to send businesses merchant statements which clearly set out the business costs of acceptance for each payment method. The ACCC urges businesses to follow up with their bank if they have not yet received these statements,” Schaper said.  “In the lead-up to last year’s excessive surcharging ban on large businesses, many reviewed and amended their surcharging practices to reflect the costs to the business and we hope small businesses will do the same.”

Payment types not covered by the ban include BPAY, PayPal, Diners Club cards, American Express cards issued directly by American Express, cash and cheques.