Clio Payments allows you to pass on credit card fees (surcharge) to your clients. This can help you offset the cost of card payment processing. In Australia, surcharging is regulated by the Australian Competition and Consumer Commission (ACCC) and the Reserve Bank of Australia (RBA). You can charge clients, but the amount cannot exceed your business's actual cost of acceptance for that payment amount.
Review surcharging compliance and cost of acceptance
The Australian Competition and Consumer Commission (ACCC) and the Reserve Bank of Australia (RBA) regulations strictly limit the surcharge you can charge to your actual Cost of Acceptance, which is the total amount your payment service provider charges your firm to process that specific card type. Charging a surcharge greater than this cost is illegal and may result in penalties from the ACCC.
Important: You will need to calculate your Cost of Acceptance (the actual cost your payment service provider charges you to accept each specific card type).
Applicable card networks and surcharge limits
The strict cost-limit rule applies to most major card types, including Visa, Mastercard, EFTPOS, and American Express cards are issued by Australian banks.
- Visa and Mastercard (Credit and Debit): The surcharge must not exceed your firm's cost to accept that specific card type. Since debit card costs are typically lower than credit card costs, if you set a standard flat rate for all cards, you must use the lowest-cost card accepted.
- EFTPOS (Credit Cards): The surcharge cannot exceed the cost of processing EFTPOS transactions. This is generally the lowest-cost method and will often determine your maximum blended fee if you choose a single flat surcharge for all cards.
- American Express (Amex): The surcharge must not exceed your cost of acceptance. Amex fees are often higher, allowing for a higher legal surcharge for Amex only.
- Other card types (e.g., Discover, JCB, UnionPay): You cannot charge the customer more than your cost to accept the card. For any card type, you must be able to substantiate your cost of acceptance to the ACCC if a complaint is made.
Actions to ensure compliance
To ensure your firm complies with Australian law when surcharging, you will need to:
- Calculate cost of acceptance: You will need to calculate the exact cost of your Clio Payment processing fees. You can substantiate this cost with your Deposit Report in Clio Manage.
- Determine maximum rate: If your firm charges a single surcharge rate for all card types, you cannot exceed the lowest Cost of Acceptance for any of those cards.
- Be transparent: Clearly and prominently display any surcharges before clients make a payment.
- Alternative payment methods: You must provide clients with the option to choose a different payment method before surcharging is applied.
- Review your annual processing costs: Your payment processing costs may change over time. The ACCC recommends reviewing and updating your surcharge levels at least annually.
Enable surcharging
To begin surcharging with Clio Payments in Clio Manage, you must first contact Clio Support to enable the feature for your account. You will receive an email confirmation when the feature is enabled.
After receiving the confirmation email and completing your cost calculation (and meeting any additional state or regulatory requirements), you can turn on surcharging using the steps below:
Note: Enabling surcharging will disable the Google Pay and Apple Pay options. Surcharges are not applied to credit card payments made using the tap-to-pay feature. Once enabled, all future payments made through the links your client accesses will include the surcharge, even if the bill was sent before you activated the feature.
- Go Settings > Online Payments.
- Click Go to Payments Settings.
- In the Payment methods card, click Manage payment methods.
- Toggle Pass on credit card fees to on.
- Review the terms and conditions and check each box to indicate that you understand and accept the terms.
- Click Enable surcharging.