If you're a small business that accepts card payments, ­listen up. This is the end of the era of excessive payment surcharges. A year ago, a ban on excessive credit card surcharges was introduced for large businesses. Now, as of 1 September 2017, all businesses accepting card payments must comply.

Under the ban, businesses can only pass on the actual cost of processing a credit card payment.

Here's how the rules work.

  1. It's up to a business whether it wants to absorb credit card processing fees into its prices, or apply a surcharge.
  2. If the business applies a surcharge, it can only charge the actual cost of processing the credit card payment for Eftpos, MasterCard, Visa, or American Express.
  3. If the processing cost is calculated as a percentage of the purchase price, then a surcharge can also be the percentage.
  4. You can also set a fixed surcharge (rather than a percentage) so long as it accurately reflects the actual cost of the transaction.
  5. If you want to set a single surcharge for all payment methods, you have to use the lowest cost surcharge, you can't use an average.
  6. If you don't comply with the rules, you can face spot fines or court penalties with maximums in excess of $1M.

So, not naming names, but to the coffee place around the corner that charged us a $0.50 surcharge on a $3.50 coffee, you'd better get your act into gear. Either you're gouging us on the surcharge, or your bank's ripping you off.

We do not disclaim anything about this article. We're quite proud of it really.