By Emma Farncomb and Clint Fillipou

On 28 April 2025, the Australian Competition and Consumer Commission (“ACCC”) issued an important reminder for businesses to review their card payment surcharges and ensure that any add-on costs are appropriately disclosed. This is a key compliance and enforcement priority for the ACCC in 2025-2026, and reflects growing angst in the community about the apparent fluidity of prices at the time of check out.

With the rise in electronic payments and an increase in consumer concerns surrounding hidden add-on costs at a time when the cost of living is in the spotlight, the ACCC is urging businesses to be upfront about card payment surcharges and transparent with their pricing practices. Careful consideration always needs to be given to price communications to ensure they are accurate, clear, and not capable of misleading consumers. When it comes to surcharges, the ACCC has further reiterated that businesses must check their “cost of acceptance” so that they are aware of the payment surcharges they can legally on-charge to customers, in line with the relevant Standards as set out by the Reserve Bank of Australia (“RBA”).

The ACCC is now, more than ever, taking an active role in monitoring business compliance and is cracking down on misleading surcharging and exploitative pricing practices (such as ‘drip pricing’ and ‘dynamic pricing’). As such, businesses need to understand their obligations and review their pricing methods to ensure they are compliant with the relevant laws and regulations under the Competition and Consumer Act 2010 (“CCA”), Australian Consumer Law (“ACL”) and RBA Standards.

So, what are the rules when it comes to surcharges?

1. Must Not Charge an Excessive Surcharge

Under the CCA, businesses are prohibited from charging customers a card payment surcharge that exceeds the “cost of acceptance”. That is, the card payment surcharge must not be higher than the amount that it costs a business to accept or process the card payment. For example, if a business’ “cost of acceptance” is 1% for a Visa card, the business can only charge 1% on Visa card payments. It must be noted that this prohibition only covers Visa and Mastercard credit and debit cards, EFTPOS and American Express companion cards (issued through an Australian financial service provider, rather than through American Express directly). Other payment cards, such as Union Pay, Diners Club and Japan Credit Bureau, will likely include conditions and surcharge caps in their merchant agreements that are similar to those enforced by the RBA’s Standard, in which case businesses will be contractually bound to comply with these conditions. For clarity, if the merchant’s payment services provider imposes a cost of acceptance for Visa transactions at 1% and an American Express cost of acceptance at 3%, the merchant must not charge a 3% surcharge on all transactions.

Although card surcharges may seem insignificant on an individual level on single, smaller purchases, undisclosed fees or disproportionate surcharges can add up to a considerable amount when spread across thousands of transactions. The onus is on businesses to make sure these surcharges are accurate and compliant. Failure to do so can lead to significant penalties, as was seen in the ACCC v CLA Trading Pty Ltd (trading as Europcar) Federal Court case. Within this case, Europcar was ordered to pay $350,000 in penalties for charging card payment surcharges that exceeded what was legally permitted by between 0.17 and 0.62 percentage points. As such, it serves as a clear reminder that businesses must monitor their card payment surcharges and ensure they are correct, otherwise, they will be at risk of breaching the CCA.

2. Cost of Acceptance Must Be Calculated Correctly

In determining the “cost of acceptance”, businesses should refer to any relevant statements or payment information issued by the payment facilitator, which will generally detail the main cost of acceptance (usually as a percentage). Fees within the cost of acceptance will likely include:

-merchant service fees;

-rental and maintenance fees for card payment terminals; and

-any other fees incurred by the business in processing card transactions, such as cross-border transaction fees, switching fees and fraud-related chargeback fees.

It must be noted that there are additional costs that can be included in the “cost of acceptance”, which are detailed in the Standard set out by the RBA. However, businesses must be careful when calculating their surcharges to ensure only those permitted costs are included and internal costs, such as labour and electricity costs, are not incorporated into the card surcharge.

3. Must Keep Records

It is further important to keep records and evidence of the costs that relate to the “cost of acceptance” and card payment surcharges. This will enable a business to substantiate and prove their card payment surcharges are compliant in any event they are challenged by a consumer or regulatory body such as the ACCC.

4. Are Businesses Allowed to Charge a Flat Rate Fee or Charge a Single Percentage Surcharge?

Businesses are permitted to charge their card payment surcharge as a flat fee if they prefer (as opposed to a percentage), however, the amount charged must not be higher than the cost of acceptance for any given payment type and must equate to the cost of acceptance percentage fee determined by the payment facilitator, all as detailed above.

With reference to charging a single percentage surcharge, it is important that businesses check whether their payment facilitators charge a single rate across multiple payment types or if there are different rates for different payment types. If a payment facilitator charges different rates and a business wishes to charge a single percentage surcharge, they can do this, however, the single surcharge must reflect the lowest cost of acceptance amount for a single payment type and cannot be the average cost of acceptance from multiple payment types. For example, if the cost of acceptance for Visa credit cards is 1% and the cost of acceptance for Visa debit cards is 1.5%, you can only charge a single surcharge of 1%, as this is the lowest of all payment methods.

Display prices and the ACL

In addition to the above, businesses must also consider their obligations under the ACL and ensure the display price of their products or services is accurate, upfront and is not capable of misleading or confusing consumers.

As per sections 18 and 29 of the ACL, businesses must not engage in misleading or deceptive conduct and must not make false or misleading representations with respect to the price of their goods and services. Section 48 further prohibits component or partial pricing if the represented price only constitutes part of the total price of the goods and services.

Therefore, when a business is advertising, promoting or communicating their products or services, they must display a single price that is the minimum total cost of buying the product or service (including any add-on costs, taxes or unavoidable extra fees that are known and calculable at the time). In all instances, the single price must be unambiguous and displayed upfront to consumers and include all parts of the price that have to be paid. As such, if a business chooses to display only part of the price, this is only acceptable where the total price is also included and shown as prominently as any other price.  These are laws that have been in place for some time now, and that the ACCC is concerned are being actively flouted.

Specifically, in relation to card payment surcharges, if there is no option for a consumer to pay for a product or service without paying the card surcharge, the minimum surcharge payable for the card payment must be included in the displayed price. In any instance, businesses must have sufficient methods in place to inform customers of these card payment surcharges, such as including the card surcharge payable via a prominent notice at the point of sale or by mentioning the surcharge in a menu.

Drip pricing and dynamic pricing

Although the ACCC has placed a strong focus on card payment surcharges, it is also important for businesses to ensure all prices displayed for any goods or services are upfront and clear to consumers. Within the online space, certain tactics, such as ‘drip pricing’ and ‘dynamic pricing’, have come under scrutiny for their potential to mislead consumers. As such, to avoid non-compliance, businesses must be aware of these practices and ensure the total price is presented clearly from the very beginning of the customer’s purchasing journey.

So, what is ‘drip pricing’ and ‘dynamic pricing’?

• ‘Drip pricing’ is when a business advertises only part of a product’s price and reveals other charges later, as the customer proceeds through the purchasing process. The charges may be mandatory charges, such as hotel resort fees or fees for optional upgrades and add-on costs. Such charges are usually gradually added during the purchasing process and can go unnoticed by customers until they reach the final stage, where they are generally confronted with a significantly higher price. These practices are commonly undertaken by airlines, accommodation and car hire companies.

• ‘Dynamic pricing’ occurs where the price of a product or service is increased during the purchasing process due to factors such as demand. This is generally seen when a consumer is waiting in a queue to purchase a concert ticket, and then once they have entered the site, the price has significantly increased. Such tactics are also usually coupled with timers that make consumers feel a sense of urgency to purchase the tickets or product.

Since these pricing strategies involve withholding the total price of a product until late in the purchasing process, it makes it difficult for consumers to compare prices with competitors and make rational purchasing decisions. As such, the Government has recently proposed the introduction of a specific and general prohibition with the aim of addressing both of these trading practices. Although the ACL does ‘generally’ cover these misleading pricing practices, the prohibition will target practices that unreasonably distort or manipulate the economic decision-making or behaviour of a consumer (for more information about this prohibition and unfair trading practices, known as ‘dark patterns’, read our article “Dark Patterns: digital deception and a threat to consumer rights, or just “digital marketing”?”). With this in mind, businesses must be cautious with how they display prices for their products or services and ensure they are upfront with consumers at the start of the purchasing process.

With the ACCC prioritising enforcement of excessive card surcharges and misleading add-on fees in 2025–2026, businesses must carefully review their pricing practices and understand their obligations under the CCA, ACL and RBA Standards. In particular, when it comes to card payment surcharges, businesses must be aware of their “cost of acceptance” so that these surcharges are calculated correctly and not mistakenly inflated. As noted by the ACCC, transparency is key, and if sufficient processes are not in place to inform consumers of all add-on costs and fees, it will damage consumer trust. Further, as discussed, businesses need to also be mindful of pricing tactics such as ‘drip pricing’ and ‘dynamic pricing’, due to their potential to mislead and confuse consumers. Given the potential for significant penalties, businesses must take the ACCC’s warning seriously and ensure that all surcharges, fees and display prices are accurate, transparent and easy for customers to understand.

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