FAQ - Are Credit Card Processing Fees Calculated in Wise-Pay within the new ACCC legislation?
As of 1st September, 2016, new legislation was introduced by the ACCC regarding Credit, debit and prepaid card surcharges. A payment surcharge is an additional amount charged by a business when you pay for goods or services by one form of payment (e.g. a credit card) rather than another (e.g. cash). The purpose of the ban is to stop businesses from charging payment surcharges that are excessive. That is, from charging a customer more than what it costs the business to process the payment.
In the case of Wise-Pay, Fees are set by IntegraPay at 2.2% (Visa, MasterCard) and 3.3% (Amex) as fixed rate fees for payment type and card types presented.
The few being charged at 2.5% and 3.5%, are within legislation as:
a) It is not materially different than the fee being charged, the customer fees charged include GST, where the 2.2% is tax exclusive. Factoring in the fee charged by Wise-Pay, it is actually within range of the gross fee collected. I.e. Wise-Pay is not profiteering from fees being charged (as was the case with the airlines charging $15 credit card booking fee)
b) The customer is using a 3rd party for processing (IntegraPay), not using their own merchant account.
c) The rates charged by banks varies by a number of factors including, card Type presented and risk of transaction (industry profile). Considering that most cards accepted will be for premium cards, then the interchange rate is much higher based on these factors.
If a business charges a payment surcharge, you may be able to avoid it by paying in a different way. For example: The customer may negotiate for "No Surcharge" if they pay their account within specific Billing Terms.
Different payment types have different costs of acceptance, so some payment types may attract a smaller surcharge, or no surcharge at all.I.e Direct Debit, does not attract a surcharge.
Do not hesitate to share with your customers the rates and charged by IntegraPay.