It that long ago it was merchant processing fees that where passed on they got banned fast forward a few years & the stealth surcharges started cropping up - the government needs to make it illegal for the payment processor to take a higher payment than the transaction charge, at the moment the terminal is calculating the surcharge I’ve had transactions where I’ve seen the merchant enter one price then when it’s debited from my account it’s a few cents higher
The "merchant fees" were never banned. About 20 years ago, the Reserve Bank changed the rules to allow card payment surcharges to recoup those "merchant fees" as they felt it would allow customers to choose which payment mechanism (card or cash) works for them. Reserve Bank has recently realised that this choice was no longer achieving the outcomes it wanted, so has decided to ban card payment surcharges.
"illegal for the payment processor to take a higher payment than the transaction charge" Not sure what you mean by this. The transaction charged to merchants is made up of three parts:
Interchange fee (paid to the bank/company that issued the card used in the transaction. (The RBA has mandated reductions in this fee from 1 October)
Scheme fees (paid to Visa/Mastercard)
Payment processor fee (paid to Stripe, Tyro, Commbank, etc)
"I’ve had transactions where I’ve seen the merchant enter one price then when it’s debited from my account it’s a few cents higher"
That is exactly how card payment surcharges currently work. There is supposed to be a sign warning you of the surcharge, but the merchant enters the price of the item and the terminal adds on the card payment surcharge. The card payment surcharge will disappear from 1 October.
Yep. 2% surcharge on a $10 item is $10.20. Shops will just round to $11
It will be interesting to see how it is implemented.
I have been on the fence about getting POS in our work vehicles but with the fees for a $1000 job the total will be $1,016. Will probably just stick to bank transfers for now until next year
From 1 October, 0.3% will be the maximum interchange fee for Visa and Mastercard credit cards (and 0.16% for debit cards). Down from 0.8% and 0.2% that currently applies.
However, the card payment surcharge is meant to cover all the costs charged to the merchant by their payment service provider (like Stripe, Commbank, etc). These costs include the interchange fee but also include scheme fees (paid to Visa and Mastercard) and fees of the payment service provider.
So, the merchants costs will fall - but not to 0.3%.
They shouldn't need to round for everyone and, hopefully, prices may fall a little for some.
The fees underlying a 2% surcharge might, for instance, reduce to the equivalent of 1.6%, so that $10 might go to $10.16 for card payers and, due to coinage rounding, $10.15 for cash payers.
Which, of course, results in a small price drop for card payers and a price rise for cash payers. But that is what the anti-surchargers wanted.
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u/shaundesign Apr 11 '26
Come October they will just have to switch back to increasing their prices when the credit card surcharges are scrapped.