Any pending changes to current credit card surcharging arrangements will not take effect until early to mid-2016, with the Australian Federation of Travel Agents still working hard to gain clarity on the issue.
Until then, current credit card surcharging arrangements continue, AFTA stressed.
In October, the Turnbull government confirmed it will ban merchants from levying credit and debit card surcharges “above the cost of acceptance” with the Australian Consumer and Competition Commission to police the new rules.
“The decision by the federal government to stick it into everyone over surcharging has certainly kept us off the street,” AFTA chief executive Jayson Westbury told Travel Weekly.
At present, the Commonwealth Government allows any business which accepts credit payments to charge a surcharge “that covers all fixed costs of accepting a credit card”. However, the fees vary from one credit card provider to another.
“It does appear that they are not going to remove the ability for retailers to surcharge. But what we don’t have yet are the rules around what you’re allowed to surcharge for,” Westbury said.
“Under the changes, surcharging will be allowed but it has to be non-excessive surcharging but they’re going to have to develop regulations for us then to understand what that means.
“So it’s an end of year shit fight basically.”
The Reserve Bank of Australia has released a discussion paper with submissions due by the beginning of February, but until then, the industry does not have any guidance as to what excessive surcharging means, Westbury confirmed.
He expected clarity on the issue when final legislation is drafted and guidance notes issued in around mid to late February.
Here are AFTA’s guidelines on how surcharges should be calculated:
Defining the responsible cost of acceptance?
– The surcharge must represent the direct cost of providing this payment option to the consumer.
What is included in the surcharge?
– The interchange fee: A merchant is charge an interchange fee for every payment it accepts from a credit or debit card
– The cost of maintaining the merchant terminal: This includes costs for example the phone line, applicable insurance and bank fees charged to have a merchant terminal
– Fraud prevention: Business must ensure they are not facilitating a fraudulent payment. Therefore business may implement fraud prevention procedures and in some circumstances a business will be required to do so by the bank and card issuer