Shaun Cooper 25 July 2018 3 min read

Payment Surcharges

Are you losing too much money through payment transaction costs?


Some customers I’ve spoken to have been surprised at both the amount they’re paying, and also the extent to which payment transaction fees can vary across different types of credit cards and payment gateways.


We can provide options to recoup some or all of your transaction costs.



Your approach will be key in achieving the balance between recouping some of your payment transaction costs and ensuring your customers remain happy. 


Will you lose orders and/or customers?

Driving away sales - and worse still, driving away customers - is not the outcome most people are hoping for when setting out to recoup some or all of their transaction expenses. Some customers can and will take additional fees as an affront, so losing them is a very real possibility! Creating a balanced strategy is less risky than trying to recover all costs.   You may choose to absorb some costs and also provide surcharge free payment options so that customers can still complete a sale without incurring additional costs if that’s what’s important to them. My advice is to tread carefully.  Before making any changes, ensure that you fully understand what impact additional fees will have on your customers and continue to monitor sales throughout any changes.


Where does the law stand?

The good news here is that the ACCC has made it very clear where their boundaries are set so we are not clouded by any ambiguity around what can and can't be included in surcharges:

“A business is not required to impose a payment surcharge, but if it chooses to then it is only allowed to pass on to the customer the costs that the business was charged for accepting payment of that payment type.

The ban applies to all businesses, regardless of their size.”

Ref: ACCC- Credit, debit & prepaid card surcharges

I strongly recommend that you visit the ACCC site if you have any legal questions around applying surcharges.


Cash Register

If you are considering a surcharge strategy then knowing where higher transaction fees come from can really help you to create a more targeted approach. 


How do transaction fees vary?

Transaction fees can vary considerably between banks and payment providers.   Even amongst credit cards, a wide range exists between standard and premium options.   The exact fees will differ according to what you have managed to negotiate with your bank or payment provider.   You may also need to check with your payment provider just in-case your contract with them precludes you from passing on any of their charges onto the customer.


How do other businesses handle it?

Some businesses who have low bank fees, higher product/order margin, or sensitive customers may prefer to fully absorb all transactional  fees so that it never becomes an obstacle to sale. Other businesses opt for a more balanced strategy where they choose to fully absorb lower transactional fees (like for standard credit cards) and impose a small surcharge to recover some of the additional costs incurred with more premium credit cards and payment gateways.

Businesses operating in a market where a significant number of their customers use cards with high transaction fees know that this is mostly due to banks passing on the cost of providing substantial rewards to their cardholders.  These cardholders are also likely to have become accustomed to these cards attracting transaction surcharges wherever they go and are less likely to be put off by them.

Providing a range of payment methods is a good idea.  If customers are able to select a payment option that does not attract a surcharge then you may be able to steer customers away from more expensive options to reduce your fees whilst still ensuring the sale.



Payment surcharges are something that you can set up for yourself by utilising a selection of easily configurable options.  


What options are available to configure?


You can achieve the strategy that’s right for your business by setting surcharge conditions either in isolation, or in combination:
  • Apply to all Payment Methods or just selected  options
  • Apply to some or all customer segments
  • Charge different percentage amounts for different payment types
  • Apply to Order payments,  Account Payments, or both
  • Calculate based on the Order Total or Order Total Less Charges (e.g. Freight Charges or Minimum Order Charges)
You can view our full list of options along with how to configure them in our article :


Payment Gateway and Credit Card Surcharges

If you would like to discuss payment surcharges or any of our other features you can contact me at any time.

Until next time…


Shaun Cooper

Customer Success Manager

Commerce Vision