THE RULES FOR CARD PAYMENT SURCHARGES
You can cover your cost of accepting card payments by adding a surcharge. You must follow The Reserve Bank of Australia (RBA) surcharging standard.
What's a card surcharge?
- A surcharge is an extra fee that you can pass on to customers to recover the cost of accepting card payments.
- The surcharge applies to payments made by credit or debit cards.
- You can’t charge a customer more than it costs you to process the transaction. Your cost of acceptance is the amount it costs you to process a payment from a particular type of card.
- There are guidelines that have been set by the Reserve Bank of Australia (RBA) on how to apply this surcharge.
What cards does it apply to?
- Mastercard® Debit and Prepaid
- Mastercard Credit
- Visa® Debit and Prepaid
- Visa Credit
- eftpos Debit and Prepaid
- American Express® cards issued by Australian banks
- UnionPay.
It doesn't apply to American Express cards not issued by Australian banks, JCB, Diners Club or Discover Card, as well as gift cards issued by a store.
How does it work?
- Every year you can review your fees and charges and decide if you want to apply a surcharge for card transactions.
- Your review needs to be completed by September 1 each year.
What are the steps to apply it?
Step 1. Review your cost of accepting card payments
The monthly cost of acceptance information, including the costs for each card type, will be included in your monthly merchant statements. The annual cost of acceptance will be shown in your June statement.
Your June monthly merchant statement, issued in early July each year, will include two tables which show how much you are being charged to process payments for different card types.
- One table will show you your monthly cost of accepting card payments and the other table will show your average annual cost of accepting card payments.
- The amount shown is the maximum percentage surcharge you will be able to apply to a customer’s transaction if they pay by card. If you want to charge your customers more than this amount, you’ll need to provide proof of how you incurred those additional costs (using contracts, statements, or invoices). If you can’t verify the costs, you may potentially face a fine.
- Any surcharge you apply to card payments cannot exceed your average annual cost of acceptance.
Here’s an example of how the table will show on your merchant statement. The rates shown are examples only. You will need to refer to your June statement to find the rates relevant to you.
| Mastercard Credit |
Visa Credit |
Mastercard Debit |
Visa Debit |
eftpos | UnionPay | |
|---|---|---|---|---|---|---|
| Net Sales |
$10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 |
| Fees Charged | $90 | $92 | $50 | $48 | $13 | $120 |
| Average Cost | 0.90% | 0.92% | 0.50% | 0.48% | 0.13% | 1.20% |
Note: If you accept American Express, you'll need to refer to your American Express statement to see your cost of acceptance.
Step 2. Apply that cost as a surcharge
Once you have reviewed your cost of accepting card payments in your June statement, you can apply that cost as a surcharge.
Here are a few examples of how you could apply the surcharge.
1. Apply one surcharge for all card payments
To make surcharging easier, you may wish to apply just one rate to all card purchases. You will need to apply your lowest annual cost of acceptance if you select this option.
In this example, 0.15% is the lowest annual cost of acceptance and the maximum rate you can charge.
The rates shown are examples only. You will need to refer to your June statement to find the rates relevant to you.
| Card scheme | Annual Cost of Acceptance % |
|---|---|
| Mastercard Credit | 1.30% |
| Visa Credit | 1.32% |
| Mastercard Debit | 0.60% |
| Visa Debit | 0.58% |
| eftpos | 0.15% Use this rate for all card types |
| UnionPay | 1.60% |
2. Apply one surcharge for Mastercard and Visa, and another surcharge for eftpos and UnionPay
This option is recommended if you would like to apply one surcharge for customers that pay by Mastercard and Visa, and another surcharge rate for eftpos and UnionPay.
In this example, 0.58% is the lowest annual cost of acceptance and the maximum rate you can charge for Mastercard and Visa cards. You can also apply a maximum surcharge of 0.15% for eftpos transactions and 1.60% for UnionPay transactions.
The rates shown are examples only. You will need to refer to your June statement to find the rates relevant to you.
| Card scheme | Annual Cost of Acceptance % |
|---|---|
| Mastercard Credit | 1.30% |
| Visa Credit | 1.32% |
| Mastercard Debit | 0.60% |
| Visa Debit | 0.58% Use this rate for Mastercard and Visa |
| eftpos | 0.15% Use this rate for eftpos |
| UnionPay | 1.60% Use this rate for UnionPay |
3. Apply different rates for credit and debit cards
This option is recommended if you want to surcharge one rate for credit cards and another for debit cards.
In this example, 1.30% is the lowest annual cost of acceptance for credit cards and 0.58% is the lowest annual cost of acceptance for debit cards. These are the maximum amounts you can charge if you apply one rate for each card type. You can also apply a maximum surcharge of 0.15% for all eftpos transactions and 1.60% for UnionPay transactions.
The rates shown are examples only. You will need to refer to your June statement to find the rates relevant to you.
| Card scheme | Annual Cost of Acceptance % |
|---|---|
| Mastercard Credit | 1.30% Use this rate for all credit cards |
| Visa Credit | 1.32% |
| Mastercard Debit | 0.60% |
| Visa Debit | 0.58% Use this rate for all debit cards |
| eftpos | 0.15% Use this rate for eftpos |
| UnionPay | 1.60% Use this rate for UnionPay |
Step 3. Add the surcharge to your merchant facility
Once you have reviewed your statement and decided how you will apply the surcharge, it’s time to update your terminal or payment gateway.
How to enable surcharging on your terminal
The surcharge function on your EFTPOS Now terminal can automatically add a surcharge to save you having to calculate it manually.
To enable the surcharge:
- Call the Merchant Helpdesk on 1800 029 749
- Tell us your surcharge rates. For any surcharge above the figure on your monthly statement, you’ll need to retain proof of how you came to this cost.
- We’ll apply the rate to your EFTPOS Now terminal.
How to enable surcharging on your integrated terminal
The surcharging function on your terminal can automatically add a surcharge to a purchase to save you having to calculate it manually.
To enable surcharging on your EFTPOS Now with Presto or EFTPOS Flex terminal:
Alternatively, your POS provider may support surcharging. Contact your POS provider for further information. |
To enable surcharging on your EFTPOS Connect terminal:
|
Note: The surcharge on your merchant facility is in addition to any surcharges set up on your POS. Please ensure the surcharge rates are applied correctly, and avoid enabling surcharges on your integrated terminal if they are already set on your POS.
How to enable surcharging on the EFTPOS Air mobile app
The surcharging function on EFTPOS Air can automatically add a fixed percentage card surcharge to a purchase to save you from having to calculate it manually.
To enable surcharging on the EFTPOS Air app:
- Navigate to the More menu.
- Select Surcharge under the Card Payments section.
- Add the surcharge to your merchant facility.
Note: Only the owner of the merchant facility can view and edit the card surcharge option.
How to update your payment gateway
To update your surcharge rate on Westpac PayWay:
- Sign into your admin console
- Add your surcharge rates.
If you use a third-party payment gateway provider, then you should contact them directly to update your surcharges for the different card types. Check the list of third-party payment gateways that are accredited with us.
FAQs
If you choose to apply a surcharge to a particular type of card payment, you can't charge a fee that is above your cost of accepting payments for that card type.
The Reserve Bank of Australia (RBA) have clearly defined what costs can be included in the 'reasonable cost of acceptance' calculation and the Australian Consumer and Competition Commission (ACCC) have monitoring and enforcement powers to ensure that all merchants do not excessively surcharge.
Your cost of accepting card payments covers all fees charged on your merchant statement, plus any fees that are separately charged by the bank, including:
- UnionPay fees
- Stationery fees
If you accept American Express, you'll need to refer to your American Express statement to find your cost of accepting card payments for that card type.
You can recover the following costs when applying a card payment surcharge:
- Merchant service fees charged by an acquirer or payment facilitator on a card transaction.
- Monthly Terminal Fee paid to the merchant’s acquirer, payment facilitator or payment service provider.
- Fraud-related chargeback fees paid to the merchant's acquirer or payment facilitator.
- Gateway or fraud prevention services fees paid to the merchant’s acquirer, payment facilitator or payment services provider.
- Cost of insurance for forward delivery risk, where that risk arises because you accept card transactions. This typically applies to agents (such as travel agents) who pay an external party to insure against the risk that the agent will be liable to a customer for the failure of a principal supplier (such as an airline or hotel) on payments accepted via cards.
If you would like to include additional eligible costs, you'll need to provide invoices, contracts, or statements to support your calculation.
Westpac doesn't issue American Express cards, so we can't see their fees and charges levied. We recommend that you contact American Express directly.
Westpac will provide you with your cost of acceptance for each card type in your June monthly statement, but it's up to you to determine what surcharge you would like to apply. You may wish to include additional eligible costs that are not billed by Westpac to calculate your final cost of acceptance.
For EFTPOS Air: No, EFTPOS Air only supports one card surcharge rate for all card schemes and types. This must reflect the lowest cost of acceptance across your supported card schemes.
For all other products: Yes. You can have one surcharge for each card scheme or type, but it must reflect the lowest cost for that card scheme.
For example, if the cost of accepting card payments for Visa Debit was 0.80% and Visa Credit was 1.30%, then the highest surcharge that could be applied across all Visa payment cards would be 0.80%, which is the lower of the two Visa Debit and Visa Credit rates.
Yes. You can apply a surcharge as a fixed dollar amount or as a percentage. Please keep in mind that you cannot charge a fee that is above your cost of accepting payments for that card type. It is up to you to determine if a fixed dollar amount is suitable for your business.
In some cases, you may find that the surcharge you’ve requested wasn’t applied and a lower rate was applied. This may happen when you’re processing contactless transactions, such as Visa payWave or Mastercard® PayPass™, where you’ve set different surcharge rates for credit and debit card types in the Mastercard card Scheme and/or for credit and debit card types in the Visa card Scheme. If your terminal can’t determine the card type, from the information contained on the card during the transaction processing, the surcharge will revert to the lower rate that you’ve set for the credit and debit card types.
For EFTPOS Air:
1. Navigate to the More menu.
2. Select Surcharge under the Card Payments section.
3. Update the surcharge rate.
For all other products: To update any surcharge rates that are automatically applied to card payment transactions on your terminal, please contact the Merchant Helpdesk on 1800 027 749, we’re available 24/7. To update your online payment gateway, please contact your third-party payment gateway provider.
The rules permit you to validate your payment costs once a year, and you set your surcharge for the next year based on that information.
You'll need to review your surcharge by September 1 each year based on your June yearly statement.
The ACCC may ask you to produce evidence of your cost of acceptance to justify the amount you are surcharging customers. The evidence may include your annual cost of acceptance statement provided by Westpac. If you've included additional expenses in your calculation you must keep invoices, contracts or other statements as proof to justify these.
If the ACCC considers your surcharges excessive, they may issue you with an infringement notice and require you to pay a fine. Failure to comply with the infringement notice may also result in the ACCC starting court proceedings against you.
If you need to refund a customer, you should refund the cost of the purchase, including any surcharge applied to the original sale.
Yes. You'll need to fully disclose any surcharges to your customers. The RBA guidelines advise that you need to prominently disclose the terms of any surcharge, including displaying signage in your business. Signage should be clearly visible, concise, and accurate to ensure that customers are fully aware and informed of your surcharges.
Things you should know
* Westpac Group is not an acquirer for American Express. Merchants that accept American Express payment scheme cards should contact American Express directly.
The information provided on this page is general in nature and does not constitute advice on your circumstances. You should seek independent legal advice as to how these changes may affect you.
Mastercard® and MasterCard® PayPass™ are registered trademarks of Mastercard International Incorporated.
Visa® and Visa payWave are registered trademarks of Visa in the United States.
If you want to accept American Express, you'll need to enter into a separate agreement with American Express. American Express® is a registered trademark of American Express.
JCB is a registered trademark of JCB International.
UnionPay is a registered trademark of UnionPay International Co., Ltd.