Smarter Surcharging: Apply a Custom Surcharge

You might have heard about ‘zero-cost’, ‘fee-free’, and ‘no-pay’ EFTPOS: as their names suggest, they offer business owners a way to accept payments without the regular transaction fees. Before you sign up, it’s important to understand how these schemes work and whether or not they’re right for your business. Fee-free EFTPOS explained. When someone makes a cashless transaction – by tapping their card or mobile device to your EFTPOS terminal – there is a cost for using the technology that moves the money from their account to your business bank account. This cost is known as a ‘transaction fee’ or ‘merchant fee’. A way for businesses to avoid having to pay this fee is to pass it on to the customer as a small surcharge that is added to the sales total. So, instead of your business incurring the cost of the transaction, your customer covers it at the time of payment. This is referred to as ‘surcharging’. Fee-free EFTPOS  means the processing fee is passed on to your customer as a surcharge. Zero-cost EFTPOS  means the cost to your business is zero, because it is passed on to your customer as a surcharge. This process is sometimes also referred to as an “automatic surcharge”, which means the cost of accepting a transaction is automatically passed on to your customer. Is surcharging legal? Yes. In Australia, it is legal to pass on the transaction fee, however, the Reserve Bank of Australia (RBA) mandates that the surcharge rate can’t be higher than the amount you incur to process card transactions (your ‘cost of acceptance’). Read our blog article to learn more about  how surcharging works in Australia  and in what states and industries it is most popular. It is important to note that if you do choose to pass on the fee to your customers, you are legally obliged to display appropriate  surcharge signage  at the point of sale. When ‘fee-free’ isn’t actually free. While the promise of ‘free’ EFTPOS processing is enticing, it’s important to make sure you fully understand the terms of your contract with your payment provider before proceeding. Many fee-free or zero-cost EFTPOS plans do indeed have additional costs and obligations, which we’ve listed below: Machine rental  – Most payment providers will charge a monthly fee for the EFTPOS hardware required to take payments. If your business requires multiple machines, this cost can quickly add up. Upfront establishment fee  – When you get started with EFTPOS, you may be charged a one-off establishment fee that covers the setting up of your payment terminal. It is usually charged per facility, so if you have more than one EFTPOS machine , you will be charged for each. Lock-in contracts  – This means you cannot remove the surcharge without help from your financial services provider, which will likely involve lodging a formal request and then waiting for it to be actioned. Minimum monthly transaction volume  – Many payment providers will only honour their ‘fee-free’ promise when you meet a minimum transaction volume, which can be upwards of $10,000 processed through your EFTPOS terminal per month. Variable fees per card type  – As a merchant, you have a responsibility to ensure your surcharge remains less than – or equal to – your cost of acceptance. However, some payment providers will charge a variable transaction fee, (one that changes depending on the card type) which makes it very difficult to predict what an appropriate surcharge will be. In order to stay within the law, you will have to surcharge an amount that, in some instances, won’t entirely cover the cost of the fee. When signing up for a zero-cost EFTPOS provider, make sure you’re asking questions to uncover the hidden charges and obligations — to ensure you’re getting the best deal for your business, and for your customers, too. To learn more about the true cost of EFTPOS, read our article on deciphering transaction fees . Zero-cost EFTPOS made simple with Zeller. At Zeller, we pride ourselves on keeping our fees simple and transparent. When you use Zero-Cost EFTPOS with Zeller Terminal, you know exactly how much (and how little) you’re paying. Purchase your EFTPOS machine outright  – Zeller Terminal is yours to own for just $99. With no monthly rental fees, this makes it the most affordable EFTPOS machine on the market. Order one online from the  Zeller Shop  and enjoy free express shipping. Turn surcharging on and off at any time  – We understand that surcharging doesn’t always sit well with the customers who have to foot the bill, which is why we have built flexible surcharging into our technology. With Zeller Terminal, you can toggle surcharging on or off with ease. What’s more, you can also customise the surcharge if you would prefer to only pass on a portion of the transaction fee. One low, flat fee  – No matter what card your customer chooses to pay with, Zeller will only ever charge one low, flat transaction fee of 1.4% to every in-person transaction — taking the guesswork out of calculating surcharges. No monthly minimum requirements  – At Zeller, we do not discriminate: our offer remains the same for all businesses. Whether you process $5 or $50,000 in a month, you will always have access to zero-cost EFTPOS. No hidden fees and no lock-in contracts  – With Zeller, what you see is what you get. Purchase Zeller Terminal outright and pay (or surcharge) 1.4% per in-person transaction. There are no additional fees, and we’ll never lock you into a contract.

If you’re surcharging in Australia, you need to notify your customers about it. In this article, you'll learn what the legal requirements are around surcharge signs, as well as accepting card-only payments and weekend and holiday surcharges. Plus, download our printable EFTPOS surcharge sign template for free. So, you’ve decided to start surcharging. To ensure you are being fully transparent with your customers as well as meeting regulatory requirements, there are certain rules around surcharge signage that you must comply with. Being aware of these as soon as you start surcharging will not only help you avoid potential disputes but, importantly, maintain good faith among your clientele. Not sure about passing the transaction fee onto your customer? This handy guide will help you decide whether surcharging is right for your business. What are the legal requirements around EFTPOS surcharge signs? Surcharging in Australia is governed by the Australian Competition & Consumer Commission (ACCC), which mandates very strict requirements around how much a business can legally surcharge ( read their guide on calculating surcharges here ). According to the ACCC , the rules around surcharge signs are as follows: If your business accepts alternative, non-surcharged payment methods (such as cash or bank transfer), then you are only legally required to have an EFTPOS surcharge sign visible at the counter. There are no specifications around how this sign must be formatted, however it must sufficiently communicate to your customers what they will be paying before they tap, dip, or swipe their card or mobile wallet. If your bank or payment provider charges a different fee per card type, then you need to specify exactly how much will be surcharged for each card. But don’t worry, we’ve done the work for you: download our****credit card surcharge sign template below, add your transaction fees, print it out and display it at your counter. If your business does not accept any payment methods that don’t incur a surcharge, then you must include the surcharge within the price of the product. For example, a $5 coffee with a 2% surcharge added to it will need to be displayed at all times as $5.10. In this instance, it is not sufficient to display the coffee as $5 on the menu and to only have a credit card surcharge sign at the point of payment. Is it legal for businesses to not accept cash? Yes, according to the Reserve Bank of Australia , there is no legal requirement for merchants to accept cash for retail payments. It is the decision of the merchant as to whether they accept or encourage payments in cash. However, the ACCC states that consumers must be made aware of these terms and conditions before they make a purchase and the total minimum price payable for the goods or services must be clearly stated (as per the example above). If you choose to stop accepting cash, make sure to update all your pricing displays to incorporate the surcharge amount into the individual prices, and ensure you have a clear and conspicuous sign detailing the payment methods you do accept. Are weekend and public holiday surcharges legal in Australia? Yes. The ACCC allows cafes and restaurants to add a surcharge on weekends and public holidays to help cover the increased costs of penalty rates during these periods. However, it’s imperative that you effectively communicate this to your customers. The ACCC mandates that the venue include the following words on the menu and/or price display: “ A surcharge of [percentage] applies on [day or days].” Additionally, the words must be at least as prominent as the most prominent price on the menu, or made visible elsewhere in your venue. How much should you surcharge on public holidays? Unlike credit card surcharges, there is no limit to the amount a business can set as a public holiday surcharge. However, the standard rate in Australia is between 10% – 15%. It is up to you as a business to assess whether you risk potential customer dissatisfaction to ensure your operational costs are covered, or whether you absorb the public holiday penalty rates with the knowledge that it might bring in more customers. The rule of thumb when it comes to surcharge signage While the ACCC doesn’t specifically detail exactly how large or visible your surcharge signs should be, they can investigate cases of non-compliance. If a customer considers that your business is breaking the rules around pricing displays, at best they won’t return to your business, but at worst, they will report you to the ACCC. It is therefore extremely important that you do not mislead your customers about what they’ll be charged or why. Ensure you have a clear, visible surcharge sign at your counter, so that consumers can easily see whether there are any additional costs that may apply before making their decision. Additionally, opt for an EFTPOS machine , such as Zeller Terminal, which calculates the surcharge and displays it clearly for the customer on-screen before they tap their card.