The Turnbull Government's legislated ban on excessive card surcharging, which comes into force this week, will mean Australian families should be charged less for purchasing a range of goods and services - including air fares and footy tickets - on their credit and debit cards. The ban comes into effect from Thursday 1 September.
Qantas has already announced sweeping changes to its surcharging practices under which it will recover only the legitimate cost of accepting cards. Virgin Australia has also indicated that it will introduce new surcharge arrangements from 1 September, and other major airlines can be expected to do the same.
For example, new and old rates published by Qantas show that a $100 domestic airfare paid for by a credit card that would have effectively attracted a 7 per cent surcharge under the its old fixed charge regime will, from 1 September, attract a surcharge of 1.3 per cent or $1.30.
Sports fans and concert goers are also likely to benefit with major ticketing firms also being subject to the ban, which is good news as we approach the finals.
In October last year the Turnbull Government committed to ensuring that consumers are treated fairly and not over-charged when they pay by card. Australian consumers have made their voice heard on this issue and we've listened, giving high priority to legislation imposing this ban which passed the Parliament in February.
The Australian Competition and Consumer Commission (ACCC) has responsibility for enforcing the ban, and there are substantial penalties in place for merchants who do not comply. The ban initially applies to large businesses.1
Smaller merchants will have a further twelve months to comply, enabling them to put compliance systems in place.
Whilst many merchants do pass on costs fairly, some have been engaged in this practice abusively. Consumers are entitled to a fair deal. That's why the Turnbull Government took action to ensure customers aren't charged more than they should be.
Earlier this year the Reserve Bank of Australia Payments System Board published standards limiting the permitted surcharge to the costs of processing a payment.
Penalties of up to $1.1 million will apply to large companies which fail to comply with the new ban on excessive payment surcharging.
1 Defined as having two of the following: gross revenue of $25 million or more, gross assets worth $12.5 million or more, or with 50 or more employees.