Review of Card Payments Regulation Box B: Competition and Consumer Amendment (Payment Surcharges) Act 2016

In October 2015, the Government released its response to the FSI, announcing that it would provide the ACCC with the power to take action in relation to instances of excessive surcharging. In February 2016, the Parliament passed legislation amending the Competition and Consumer Act 2010, enabling the ACCC to issue infringement notices to entities that it considered were surcharging in excess of ‘permitted surcharge’ levels, with the definition of permitted surcharge to be defined in a Reserve Bank standard or in a regulation.

In determining its approach to surcharging, the Board has taken into account two important factors:

• The need to ensure that any definition of permitted surcharge is consistent with its mandate to promote the public interest (section 2.3).
• The need to define ‘permitted surcharge’ in a way that can be clearly understood by merchants and is able to be enforced by the ACCC.

Given that the legislation creates obligations for merchants and introduces a new enforcement regime which could potentially involve infringement actions and fines from the ACCC, the Board has been mindful of the need for the definition of permitted surcharge to be as clear as possible. The approach taken sets out a limited list of defined items that can be included in a permitted surcharge, and limits these to cost items that a merchant can readily provide evidence of if required to do so by the ACCC. The scope of included items is narrower than under the current ‘reasonable cost of acceptance’ and should be able to be both clearly understood by merchants and readily enforceable by the ACCC.