Europcar to pay significant penalties for excessive card payment surcharges


Following Australian Competition and Consumer Commission (ACCC) proceedings, the Federal Court has ordered CLA Trading Pty Ltd (trading as Europcar) to pay $350,000 in penalties for breaching the ban on excessive credit and debit card payment surcharges. The ACCC’s proceedings only relate to the 96 outlets which are owned and operated by Europcar and not those run by franchisees.

Between July and November 2017, Europcar charged surcharges of up to 1.43 per cent, although the rates varied over time and by the type of card. The company admitted that these surcharges were higher than its bank’s costs for accepting these payments.

The amount of each excessive surcharge charged by Europcar was relatively small, at an average of just over $1 per customer. However, Europcar imposed excessive surcharges on transactions affecting 63,012 customers and over-charged more than $67,000. 

The ban on excessive surcharges provides that businesses can only pass on to customers what it costs them to process a credit or debit card payment (known as the ‘cost of acceptance’).

It is important to remember:

  • Only pass on to customers what it costs you. For example, if the ‘cost of acceptance’ for a Mastercard is 1 per cent, a business can only charge a surcharge of 1 per cent on Mastercard payments.
  • That payment surcharges can be set as a flat or fixed fee, but must not exceed the cost of acceptance for any given transaction.
  • To keep a record and evidence of your costs relating to costs of acceptance.
  • To ensure your customers are aware of any applicable surcharges.