1 week Ago By Joe Gallop
Australian businesses are being warned to stop gouging customers with excessive card payment surcharges as the Australian Competition & Consumer Commission (ACCC) ramps up efforts to crack down on misleading and illegal pricing practices. The consumer watchdog has urged businesses, particularly small operators, to urgently review the surcharges they are applying to card payments. Under Australian law, businesses are only allowed to pass on the actual cost of processing a card transaction, not use it as an opportunity to profit.
The warning comes amid growing concern that some businesses are effectively ripping off customers by slapping them with inflated fees at the checkout, often without clear upfront disclosure. “Businesses need to ensure their customers know about any card payment surcharges upfront, and that they are only charging what it costs them to accept those card payments,” said ACCC Deputy Chair Mick Keogh. The ACCC says monitoring and cracking down on misleading surcharges and hidden costs will be a key enforcement priority for the 2025–26 financial year.
Under the law, if a business’s cost to accept a Visa card, for example, is 1%, it cannot legally charge a surcharge of more than 1%. However, the ACCC says some businesses are either unaware of the rules or ignoring them, risking heavy penalties and a loss of customer trust. ACCC Deputy Chair Mick Keogh The Competition and Consumer Act prohibits businesses from charging “excessive” payment surcharges and from misleading consumers about the true price of goods or services.
As part of its compliance campaign, the ACCC is providing new guidance materials, working with industry groups, and warning that active enforcement action may follow where businesses don’t get the message. Mr Keogh said while small businesses already face a mountain of regulations, understanding pricing transparency is critical: “Charging excessive surcharges and not being upfront with customers about pricing can result in small businesses losing customers.” The ACCC is encouraging businesses to check their merchant statements, review their ‘cost of acceptance’, and seek advice if needed from banks, accountants, or business advisors.
The crackdown comes as the Reserve Bank of Australia finalises a major review of retail payments regulations, with further reforms expected later this year. Businesses and consumers who suspect unfair surcharging have been encouraged to report it directly to the ACCC..
