The Reserve Bank of Australia (RBA) recently introduced Standard No 3 of 2016 (the “RBA Standard”). The objective of the RBA Standard is to promote efficiency and competition in the Australian payments system. It includes surcharging regulations for merchants who accept certain card scheme payments and choose to surcharge their customers for the cost of doing so.

For large merchants (as defined by the RBA Standard), these surcharging regulations have been in place from 1 September 2016.  These regulations will apply to all merchants from 1 September 2017.

Permitted surcharge costs are listed in the RBA Standard and include fees paid to the merchant’s acquirer such as merchant service fees, card transaction processing fees and certain other observable costs paid to third parties for services directly related to accepting particular types of cards.

Please note that the information provided on this page including the FAQs is general in nature and does not constitute advice on your particular circumstances and obligations. If you plan to surcharge, you should ensure that you and your staff are fully aware and informed of the detailed provisions of the RBA Standard. Compliance with the RBA Standard is your responsibility as a merchant.  We encourage you to seek independent advice on what you need to do to comply.  

A full copy of the RBA Standard (Standard No 3 of 2016) is available on the RBA Website.

How do surcharging regulations impact me as a merchant?

If you apply a surcharge for card payments, under the RBA Standard, the maximum surcharge you can apply is limited to the average amount it costs you to accept that type of card for that transaction during a 12 month period which ended not more than 13 months ago (the “Reference Period”)

The card types covered by the surcharging regulation are:

(Note that UnionPay cards are not covered by the surcharging regulation.)

What information is available to help me understand how much to surcharge?

To help you comply with the new surcharging regulations, we’ve made some simple changes to your merchant statement.

From 1 July 2017, your merchant statement will include a “Monthly Cost of Acceptance” table and a “12 Month (Annual) Cost of Acceptance” table.  These tables show the average costs of accepting each card type during the respective periods, based on the Net Sales and Net Fees that appeared on your ANZ statement.

Surcharges will be limited to the average amount it costs you to accept that type of transaction during the Reference Period. Calculating the amount to surcharge is your responsibility. However you can use your new Cost of Acceptance Tables to help you.

Click here FOR MORE INFORMATION ON CHANGES TO YOUR ANZ STATEMENT (PDF 64kB).

FAQs

Do I have to surcharge?
It’s your decision whether you choose to surcharge customers for card payments or not.  For more information refer to the ACCC Fact Sheet.
How much can I surcharge?

Calculating the amount to surcharge is your responsibility. Under the surcharging regulations, the amount you can surcharge customers (e.g. at the time of payment), must be limited to the average cost to accept that card type for the transaction during a 12 month period which ended not more than 13 months ago.  You will be able to use the information on your ANZ Statement to assist you.

The Average Cost percentage shown in your Monthly Cost of Acceptance Table on your ANZ Statement reflects net fees as a percentage of net sales for the period.  The surcharging regulations allow specific other costs to be recovered from a payment surcharge, if they directly relate to the card type being surcharged.  These costs may include:

  • fraud prevention services,
  • direct gateway costs,
  • switching fees, or
  • insurance premiums for provision of goods/services not being provided due to payments effected by card transactions.

These costs must be verifiable via contracts, statements or invoices.  Costs internal to your business cannot be included in a surcharge.  Refer to the RBA website for more information.

What if I don’t surcharge?
If you do not surcharge for card payments then your business is not affected by these changes.  The Cost of Acceptance Tables will be included on your ANZ statements and you do not need to do anything with this information unless you decide to surcharge in the future.
Why are there two Cost of Acceptance Tables on my ANZ Statement?

There are two new tables in your ANZ Statement: a Monthly Cost of Acceptance Table and a 12 Month (Annual) table.

The monthly table shows net sales, net fees and the average cost for the statement period and the 12 Month (Annual) Cost of Acceptance table shows this information for the previous 12 months, inclusive of the current statement period.

Which table should I refer to if I am planning to surcharge my customers?
If you do choose to surcharge, we recommend that you refer to your 12 Month (Annual) Table.
Under the RBA Standard, a surcharge must not exceed the average costs of accepting a card type over a 12 month period that ended not more than 13 months ago. If 12 months of information is not available, you should make a good faith estimate of your cost of acceptance based on the available information, such as any recent statements you have received.  Refer to the RBA website for more information.
Can I charge one percentage surcharge across all card types?
You may choose to surcharge the same percentage rate for multiple card types. However under the surcharging regulation, you are required to set the surcharge based on the lowest average cost of acceptance across all of the card types.
Click to expand or contractCan I see an example of how I could surcharge differently?

Below are three simple examples explaining the Cost of Acceptance Tables and how they may assist you, if you choose to surcharge.

Please note that the information provided below for illustrative purposes only.  If you plan to surcharge, we encourage you to seek independent legal and financial advice as to how these changes may affect you.  

12 Month (Annual) Cost of Acceptance Table
Card Type Net Sales Net Fees
(GST Inclusive)
Average Cost %
(Net Fees/Net Sales)
Visa Debit $10,000.00 $61.10 0.611%
Visa Credit $10,000.00 $142.00 1.420%
MasterCard Debit $10,000.00 $50.00 0.500%
MasterCard Credit $10,000.00 $153.20 1.532%
UnionPay $10,000.00 $220.00 2.200%
eftpos $10,000.00 $25.00 0.250%
Notes to Table – Important, please read

The information in these tables may be used to determine a permitted surcharge amount under the surcharging and related regulations.

  • The 12 Month Cost of Acceptance includes your Net Sales, Net Fees and Average Cost % for the last 12 months, inclusive of the current billing month.
  • These tables only include the ANZ supplied elements of your Cost of Acceptance.
  • Net Fees includes all fees and charges appearing on your statement after any ascertainable rebates.
  • Minor rounding may apply to the Net Fees set out in both tables compared to what was billed to your account.
  • The Visa Debit, MasterCard Debit and eftpos categories include Prepaid transactions where applicable.
  • UnionPay is not covered by the regulations.

Using the example percentages in the 12 Month (Annual) Cost of Acceptance Table above and assuming you do not wish to include other non-ANZ costs

1. One rate for all cards:

If you want to apply one rate for all cards, then in order to comply with the surcharging regulations you need to choose the lowest average annual cost of acceptance %.

In the example above, 0.250% is the lowest average annual cost of acceptance.

2. Two rates: One rate for Visa and MasterCard; and another rate for eftpos.

Another option, you may wish to apply the same surcharge for customers who pay with Visa and MasterCard, and a different rate for eftpos.

In the example above, 0.500% is the lowest average annual cost of acceptance for Visa and MasterCard. 0.250% is the average annual cost of acceptance for eftpos cards.

3. Three rates: Credit, Debit and eftpos

You may wish to apply a surcharge with one rate for credit cards (both Visa and Mastercard); another for debit cards (both Visa and Mastercard); and another for eftpos cards.

In the example above, 1.420% is the lowest average annual cost of acceptance for Visa and Mastercard credit cards; 0.500% is the lowest average annual cost of acceptance for Visa and Mastercard debit cards; and 0.250% is the average annual cost of acceptance for eftpos cards.

When do the surcharging regulations become mandatory for Merchants?

For large merchants (as defined by the RBA Standard), these surcharging regulations have been in place from 1 September 2016.

These regulations will apply to all merchants from 1 September 2017.

How will surcharging be monitored?
The Australian Competition and Consumer Commission (ACCC) has powers to enforce compliance with the RBA Standard from 1 September 2016 for large merchants and 1 September 2017 for all remaining merchants. Enforcement powers include monetary fines for non-compliance. Merchants must ensure they are compliant with the surcharging regulations and can demonstrate that their surcharging amount does not exceed their cost of acceptance.

 

Where can I find more information?

 

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