Local small business retailers need to ensure that they are surcharging correctly as the ACCC has said it will act.
After years of inaction on card surcharging, the ACCC a week ago warned small business it is cracking down with potentially considerable fines.
The move comes ahead of the Reserve Bank of Australia’s preliminary findings on the Review of Merchant Card Payment Costs and Surcharging expected by mid-year, and after both the RBA Governor Michele Bullock and ACCC Chair suggested there may be no legal grounds to stop the high blended rates charged to small businesses.
Here’s an issue some small business retailers may find. Some have their software platform funded through their payments costs and they pass all of these on to their customers. This means their customers are being surcharged for payment costs and POS software access costs. This is likely viewed y the ACCC as outside was is acceptable.
The other aspect that may concern some is the disparity in payments costs and, therefore, surcharges. Consider two retailers in the same type of business, in the same town. One chooses a payments platform that costs them .7% and the other chooses a payments platform that costs them 1.5%. The second business has a surcharge double of the first. This business could get the lower costs payments but is too lazy to negotiate access to it. That results in their customers paying a higher surcharge than they otherwise might.
The ACCC said it is monitoring business compliance, and may take appropriate compliance or enforcement action. Our point in writing abut this today is to draw it to the attention of local small business retailers.
The maximum pecuniary penalty for breaches of the prohibition against excessive payment surcharges is: $2,135,430 (6,471 penalty units) for corporations; $427,350 (1,295 penalty units) for individuals
Where the ACCC has reasonable grounds to believe that a business has charged a payment surcharge which is excessive, it can issue an infringement notice: $19,800 (60 penalty units) for corporations; $198,000 (600 penalty units) for listed corporations; $3,960 (12 penalty units) for individuals.
While Tower Systems is payments gateway agnostic, we do offer our customers access to a low cost gateway. This saves them a ton of money.
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