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What is a card surcharge?

  • You can charge an extra fee, known as a surcharge, to customers paying by card.
  • The surcharge is to recover the cost of processing credit or debit card transactions, known as the cost of accepting card payments. 
  • You cannot charge a customer more than it costs you to process the transaction.
  • There are rules that have been set by the Reserve Bank of Australia (RBA) on how you apply the 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 does not 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 have an opportunity to review your fees and charges and decide if you will apply a surcharge to your transactions. 
  • Your review needs to be completed by 1 September each year. 

Here are the steps

Step 1. Review your cost of accepting card payments

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, or 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 will 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 terminal or payment gateway

One 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 auto-surcharging on your terminal

The auto-surcharge function on your EFTPOS 1 or EFTPOS Now terminal can automatically add a surcharge to save you having to calculate it manually.

To enable the auto-surcharge:

  1. Call the Merchant Helpdesk on 1800 029 749
  2. 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.
  3. We’ll apply the rate to your EFTPOS 1 or EFTPOS Now terminal.

Note: Auto-surcharging is not available for contactless transactions on the EFTPOS 1 terminal.

How to update your payment gateway

To update your surcharge rate on Westpac PayWay

  1. Sign into your admin console
  2. 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 Westpac.

FAQs

If you choose to apply a surcharge to a particular type of card payment, you cannot 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 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.

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.