Australian Surcharging: Eftpos Solutions & Payment Apps

If you're a business owner in Australia, you've probably witnessed plenty of heated discussions about payment surcharging lately. From news headlines to industry forums, opinions abound on whether the Reserve Bank of Australia should ban surcharging altogether. 

But merchants often have little control over traditional eftpos solutions and payment app surcharges, a lack of transparency that can frustrate customers and lead to regulatory scrutiny. Unfortunately, both of these issues could significantly impact your bottom line.

In this guide, we’ll give you the facts on Australia's surcharging regulations and offer practical strategies to navigate them. You’ll discover transparent alternatives to traditional merchant services, get a better understanding of your compliance obligations and learn how modern payment solutions can help protect your business while keeping customers happy.

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Understanding the Reserve Bank's Position on Surcharging

The Reserve Bank of Australia has proposed abolishing card payment surcharges, but contrary to popular belief, their potential intervention isn't primarily about merchants deliberately overcharging customers.

The Real Issue: Lack of Transparency

The core problem lies in the way modern payment processing works. When businesses use traditional merchant services or standard eftpos solutions, the surcharge rates tend to be set automatically by the payment service provider, not the merchant.

Business owners often aren’t aware of the exact surcharge being applied to each transaction and customers see varying surcharge amounts without understanding why. This disconnect between merchant intent and customer experience can create friction.

Proposed Changes and Timeline

While no final decisions have been made, the RBA has indicated they’re considering stricter guidelines on surcharge transparency, potential caps on surcharge amounts, enhanced disclosure requirements for payment providers and possible restrictions on certain types of surcharging.

Industry experts suggest any major changes would likely be implemented gradually, giving businesses time to adapt their payment processing systems.

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How Surcharging Really Works vs. Merchant Perceptions

There's a significant gap between how some merchants think surcharging works and the reality of modern payment processing systems.

The Merchant Perspective

Many business owners believe they have direct control over surcharging, expecting to be able to set specific surcharge rates for different card types, easily adjust surcharges based on their actual costs and turn surcharging on or off at will.

The Technical Reality

In practice, especially with traditional mobile eftpos machine setups and conventional payment apps, the process is largely automated.

Payment processors calculate surcharges based on interchange fees and their own margins. This means surcharge rates can vary by transaction type, card issuer and time of processing.

Many systems apply blanket surcharge rates rather than cost-reflective pricing, with merchants receiving limited visibility into the breakdown of fees.

The Customer Experience Problem

This disconnect creates several issues. Customers see inconsistent surcharge amounts for similar purchases, business owners can't adequately explain surcharge variations and trust erodes when the charges seem arbitrary or excessive.

According to recent consumer research, over 60% of Australian consumers report feeling frustrated by unpredictable surcharging, with many actively avoiding businesses that apply what they perceive as excessive fees.However, according to Pebl CEO Elliot Cohen, banning surcharges altogether could lead to other customer experience problems.“if business owners are no longer able to apply surcharges to transactions, they’ll either need to absorb varying card fees or build them into their pricing,” he says.“For the small business, this will just drive customers to shop for cheaper alternatives, which will be the businesses large enough to negotiate their own special rates from banks and schemes. “We might be better off focusing on making in-person A2A payments easier, capping IC/scheme fees and helping businesses to stay transparent, not reactive.”

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Pebl's Transparent Approach to Payment Processing

Regardless of what the RBA decides, Pebl believes simplicity should be at the heart of any payment solution. Our approach to payment processing addresses many of the concerns raised by both merchants and regulators through transparent pricing and automated features.

Simple, Transparent Fee Structure

Unlike traditional payment providers, Pebl offers:

• Straightforward pricing at 1.80% per transaction, with no monthly fees or sign-up costs
• Auto-surcharging capability that automatically passes transaction fees to customers when enabled
• No hardware requirements, with your iPhone or Android device becoming the payment terminal
• Quick setup, allowing you to start accepting payments in just five minutes.

Impact on Different Business Types

Our simple approach to mobile payments benefits various business categories.

Trades and Mobile Services

• No equipment to carry or maintain, as you can just use your existing phone
• Auto-surcharging, which ensures you receive the full sale amount
• Quick setup, enabling immediate payment acceptance at any job site.

Service-Based Businesses

• A predictable 1.80% rate to help with accurate job quoting
• Professional payment processing with major card and digital wallet support
• Xero integration, which streamlines invoicing and payment reconciliation.

Retail and Hospitality

• Tap to Pay functionality, providing fast, contactless transactions
• Team management, allowing multiple staff to accept payments on their devices
• Real-time reporting, which helps track sales and settlements.

Alternative Payment Methods

Beyond traditional card processing, Pebl supports:

• PayID payments for instant, account-to-account transfers
• QR code payments for contactless transactions
• Payment links via SMS for remote payments
• Digital wallets, including Apple Pay and Google Pay.

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Practical Compliance Guidance for Business Owners

Regardless of which payment solution you choose, staying compliant with current and future surcharging regulations requires a proactive approach.

Current Compliance Requirements

Under existing Australian Consumer Law, businesses must:

• Clearly disclose surcharges before customers commit to purchases.
• Limit surcharges to the actual cost of payment acceptance.
• Display surcharge information prominently at point of sale.
• Provide receipts showing the breakdown of charges.

Best Practices for Surcharge Management

Documentation and Record-Keeping

• Maintain detailed records of your actual payment processing costs
• Document the rationale behind your surcharge rates
• Keep receipts and statements from your payment provider
• Regularly review and update your surcharge rates based on actual costs.

Customer Communication

• Use clear, simple language to explain surcharging policies
• Train staff to answer customer questions about payment fees
• Consider displaying a fee schedule at your point of sale
• Provide multiple payment options when possible.

Technology Considerations 

When evaluating eftpos solutions and payment apps, prioritise features like:

• Real-time fee transparency
• Detailed transaction reporting
• Flexible surcharge configuration
• Compliance monitoring tools.

Preparing for Future Changes

Recent regulatory consultations suggest that businesses should prepare for potentially stricter requirements by:

• Implementing systems that provide granular control over surcharging
• Exploring alternative payment methods that reduce reliance on card networks
• Developing clear policies for handling different payment types
• Training staff on compliance requirements and customer communication.

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Key Takeaways: Navigating the Surcharging Landscape

The Australian surcharging debate reflects broader concerns about transparency and fairness in payment processing. While regulatory changes may be coming, businesses that prioritise transparency and customer experience will be best positioned to succeed regardless of the final outcomes.

Essential Actions for Business Owners

You can navigate this complex landscape by:

• Choosing payment providers that offer clear, transparent pricing
• Implementing systems that give you control over surcharging decisions
• Maintaining detailed records of your actual payment processing costs
• Exploring alternative payment methods that reduce fee burdens
• Staying informed about regulatory developments and industry best practices.

Modern merchant services should empower you to make informed decisions about payment processing, not leave you guessing about costs and compliance requirements.Contact the Pebl team today for a free consultation and see how we can simplify your payment processing while keeping you compliant with current and future regulations.