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More shoppers being hit by card surcharges – but we don’t seem to mind



Some businesses charge a flat fee rather than a percentage surcharge, but even a flat fee should reflect the merchants’ costs.

Merchants must display surcharges when there is no way to avoid them, such as paying cash, the ACCC says on its website. They should still display surcharges even if they take cash, the regulator says.

The ban on excessive payment surcharges does not apply to BPAY, PayPal, Diners Club, American Express cards issued directly by American Express, or taxi fares.

The RBA’s report underlines the importance of using rewards cards strategically, says Sally Tindall, the head of research at comparison site RateCity.

“If a merchant is going to charge you more for paying with a rewards credit card, the cost of the surcharge could easily outweigh the value of the points you’ll collect,” she says.

“When faced with a hefty surcharge for payment with a credit card, it’s good to have a debit card on hand.”


However, if the merchant charges a flat fee, regardless of how you pay electronically, then you may as well collect the reward points, she says.

The RBA’s survey shows the percentage of card payment online attracting a surcharge, over the same period, declined slightly, from 9.2 per cent to 8.5 per cent.

In the last five years, the ACCC has imposed financial penalties on three companies for excessive payment surcharges – Fitness First Australia in 2018, Eurocar in 2019, and Nine Entertainment, the publisher of this masthead, in July 2021. No financial penalties have been imposed since.

Since 2018 it has been unlawful in the United Kingdom and the European Union for retailers to charge additional fees when a consumer uses a particular credit or debit card. The ban covers purchases online. The ban in the United Kingdom also includes other payment systems like PayPal.

  • Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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