This guide offers a summary of card surcharge compliance provided by Ignition.

Before moving ahead, we encourage you to think carefully about whether applying a card surcharge is right for your business.

If clients expect to pay you in the most convenient way for them, applying a surcharge could create a negative customer experience. On the other hand, if all your clients currently pay you from their bank account and you want to offer an additional payment option, surcharging could be a good fit for your business.

The Australian Competition & Consumer Commission (ACCC) regulates the use of card surcharges in Australia.

Their advice to merchants* is summarised on this page. We strongly recommend reading the advice in full.

There is a ban on “excessive surcharges”. Roughly speaking, an excessive surcharge is defined as one that exceeds the merchant's* cost of processing the payment.

* "Merchant" refers to your company.

The ACCC also states that:

If a business wants to set the same surcharge for all payment types, it must not be more than the lowest surcharge they would set for a single payment type.

This may imply that you should not set your surcharge rate above Ignition’s “standard” card payment processing tier (1.95%).

As an Australian business, if you opt to apply a card processing fee, those surcharges are generally inclusive of GST.

Your clients may wish to claim GST credits for the surcharge amount.

Any surcharge of $75 or less doesn’t require a tax invoice for the surcharge. It can be claimed as a deduction by your client without needing to issue an updated invoice.

Where the surcharge fee exceeds $75, clients may ask for an adjusted invoice or adjustment note. We suggest advising your client that you will have to create an adjusted invoice or adjustment note outside of Ignition in this scenario.

To help clarify this for clients, we recommend including some extra information in your Xero invoice branding theme or QuickBooks invoice template settings: