Reading time: 4 minutes

In our latest two articles, we took you through the legal updates affecting how businesses manage their surcharges for card payments. Now that you understand the law, it’s important to draw your attention to how these changes will impact your business from an operational perspective. In this article, we answer nine FAQs about the ban on excessive surcharges and how it applies to businesses in practice.

What is the Purpose of the Ban?

The ban prohibits businesses from charging customers excessive fees when using MasterCard, Eftpos, Visa and American Express. Businesses will only be allowed to pass on to customers what it costs the business to process payments — known as the “cost of acceptance”.

Does the Ban Apply to All Businesses?

From 1 September 2017, the ban will apply to all businesses that charge customers for using MasterCard, Eftpos, Visa and American Express. The ban has applied to large businesses since 1 September 2016 and will extend to all businesses from 1 September 2017, including small businesses.

I Don’t Pass on Fees to my Customers for Using Card Payments. Does the Ban Still Affect Me?

The ban applies to businesses that choose to pass on a surcharge fee to their customers for accepting the payment methods listed above. It is not compulsory to pass on these fees and businesses have a few options here. For example, businesses can:

  • absorb the fees in the price of their goods or services; or  
  • cover the fees themselves and not pass them on to their customers in a surcharge or the price of their goods or services.

However, businesses that do not pass on their costs of accepting payments may be absorbing large bank fees which legally can be passed on to a customer.

Can I Apply a Flat Rate Surcharge?

Businesses may choose to impose one flat surcharge rate (as a percentage) for all payments to make it easier to manage their payment processes. However, businesses doing so must ensure that the percentage applied does not exceed the cost of acceptance for any particular transaction.

Can I Apply a Fixed Surcharge Fee?

A business can also choose to apply a fixed fee (in dollars) for all transactions. But, once again, you must ensure that the fixed fee is not excessive for each card transaction.

Can my Business Still Charge a Handling or Processing Fee?

The new laws do not prevent a business from being able to pass on a handling fee or other fees that are unrelated to the payment method used by the customer.  

How Often Should I Review my Surcharge Levels?

Your surcharge levels should be reviewed annually. While the costs you pay may fluctuate from month to month, the RBA Standard has been designed to allow you to review your costs once a year using an annual statement from your bank and other materials.

From 1 June 2017, banks are required to send monthly statements outlining the cost of acceptance for each payment type, expressed as a percentage. You can reset your surcharge levels more frequently using these statements.

You will not be receiving an annual statement or monthly statement for any additional fees that you may also pay on as a surcharge. For these fees, you will need to calculate the permitted surcharge yourself.

What if I’ve Recently Changed Banks or if I’m a New Business?

If you have changed banks within the last 12 months or been trading for less than 12 months, you won’t have an annual statement from your bank for this year. However, the RBA Standard allows you to estimate your permitted cost of acceptance in good faith. Monthly statements can help you to reach a reasonable figure.

How Can LegalVision Help my Business?

To help SMEs comply with the ban, LegalVision is offering a service to make sure your surcharge levels are in order before the new laws come into effect: the Surcharge Checker. For only $99 (ex GST), a LegalVision lawyer will:

  1. review your current surcharge practices;
  2. review your bank materials to determine your surcharge options;
  3. offer you a consultation to discuss your options under the new laws; and
  4. provide you with a certificate confirming your legal surcharge options.


If you have any questions about the ban on excessive surcharges, get in touch with LegalVision’s consumer lawyers today on 1300 544 755 or fill in the form on this page.


Redundancies and Restructuring: Understanding Your Employer Obligations

Thursday 7 July | 11:00 - 11:45am

If you plan on making a role redundant, it is crucial that you understand your employer obligations. Our free webinar will explain.
Register Now

How to Sponsor Foreign Workers For Your Tech Business

Wednesday 13 July | 11:00 - 11:45am

Need web3 talent for your tech business? Consider sponsoring workers from overseas. Join our free webinar to learn more.
Register Now

Advertising 101: Social Media, Influencers and the Law

Thursday 21 July | 11:00 - 11:45am

Learn how to promote your business on social media without breaking the law. Register for our free webinar today.
Register Now

Structuring for Certainty in Uncertain Times

Tuesday 26 July | 12:00 - 12:45pm

Learn how to structure to weather storm and ensure you can take advantage of the “green shoots” opportunities arising on the other side of a recession.
Register Now

Playing for the Prize: How to Run Trade Promotions

Thursday 28 July | 11:00 - 11:45am

Running a promotion with a prize? Your business has specific trade promotion obligations. Join our free webinar to learn more.
Register Now

Web3 Essentials: Understanding SAFT Agreements

Tuesday 2 August | 11:00 - 11:45am

Learn how SAFT Agreements can help your Web3 business when raising capital. Register today for our free webinar.
Register Now

Understanding Your Annual Franchise Update Obligations

Wednesday 3 August | 11:00 - 11:45am

Franchisors must meet annual reporting obligations each October. Understand your legal requirements by registering for our free webinar today.
Register Now

Legal Essentials for Product Manufacturers

Thursday 11 August | 11:00 - 11:45am

As a product manufacturer, do you know your legal obligations if there is a product recall? Join our free webinar to learn more.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2022 Law Firm of the Year Winner 2022 Law Firm of the Year - Australasian Law Awards