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Guide to Merchant Obligations – Credit Card Surcharging

By April 16, 2019March 5th, 2021Help Articles, Your EFTPOS Facility
Do you want to offer your customers flexible payment options without increasing your costs? Applying a surcharge to credit card transactions is an excellent way to recoup the cost of credit card transactions without penalising your entire customer base.
There are clear legal obligations you must meet if you add a surcharge to your normal prices when a Cardholder pays by credit card.


Do I need to tell my customers about the surcharge?

Yes, you must clearly display notices, signs or decals at your physical premises, as well as a notice next to your Point of Sale, in a minimum of Arial 10 point font, disclosing that you will apply a surcharge when payment is made by Credit Card. In the absence of a physical point of sale, such notices or signs must be displayed prominently during an Internet order transaction or communicated clearly in a telephone order, in each case prior to the transaction being processed. We have provided you with a sign to display at your Point of Sale.


When do I need to tell my customers about the surcharge?

You must ensure the surcharge is clearly disclosed to the Cardholder prior to the completion of the transaction and give the Cardholder the opportunity to cancel once the surcharge has been disclosed. Our Surcharge solution has been developed to meet this obligation by offering customers the opportunity to cancel the transaction.


How do I work out the value of my surcharge?

You must ensure the surcharge bears a reasonable relationship to your cost of accepting the Credit Card. The Cardholder must be informed of the rate, amount or method of calculation of the surcharge at the time of purchase. You can choose to apply the surcharge as a flat fee, or as a percentage (with optional minimum and maximum surcharge amounts). You can also set a minimum and maximum purchase amount that triggers a surcharge. Our Surcharge solution has been designed to clearly display on the terminal screen the surcharge amount


Are there limits to the amount I can surcharge?

Yes, there are maximum limits. If you choose to apply the surcharge as a flat fee the maximum is $9; if you choose to apply the surcharge as a percentage the maximum is 9%.


Does the surcharge have to be part of the purchase transaction?

Yes, the surcharge must be processed as part of the total amount of the transaction. We have taken care of this obligation for you as part of our Surcharge solution.


How do I describe the surcharge to my customers?

Inform your customers that you apply a surcharge to payments made using a credit card, which is in line with your cost of acceptance. You must not describe the surcharge as, or inform the cardholder that the surcharge is, applied by a card scheme, by us or by a third party financial institution.


What cards can I surcharge?

In New Zealand, it is legal for merchants to pass on the Merchant Service Fee (or MSF) for accepting certain cards to the cardholder at the point of purchase. These fees apply to ‘scheme’ transactions, which are passed through a third-party connection and includes payments made on Visa, Mastercard, UnionPay AMEX, Diner and JCB cards.

If the cardholder inserts or swipes their EFTPOS or scheme card and chooses ‘Cheque’ or ‘Savings’, the transaction is free for you to process. But if the customer taps their contactless card or device, or swipes or inserts their scheme card and chooses ‘Credit’, the transaction will contribute to your MSF.

When you enable surcharging on your Eftpos NZ terminal, your terminal will automatically detect when the transaction is a ‘scheme’ transaction and apply a surcharge. You can apply different surcharge rates to different schemes to accurately reflect different costs of acceptance.

Please note that the Eftpos New Zealand surcharging solution currently cannot apply a surcharge to purchases made with a contactless card. However, contactless surcharging will be available on our Android payment devices.


Does the surcharge amount have to display separately on the receipt?

As part of our Surcharge solution, we have taken care of the receipt requirements for you. The transaction amount and surcharge amount are listed separately on the receipt.