Can your landlord charge you a fee for paying your rent?

Australians made over 1.1 billion retail payments in August alone using their debit and credit cards which, according to the Reserve Bank, resulted in a total spend of roughly $76 billion.

All of these payments come with a cost attached though. The first are the fees businesses are charged by payment providers for each card transaction made, which the RBA estimates are, on average:

• Less than 0.5% for Eftpos
• Between 0.5% and 1% for Mastercard and Visa debit
• Between 1% and 1.5% for Mastercard and Visa credit

These fees are then often passed on to customers at checkout via surcharges which, since 2017, have been capped so that businesses can only charge the true cost of processing the card payment.

That doesn't mean that they don't add up though. For instance, if you booked $1200 worth of flights and accommodation for a family holiday using a credit card with a 1% surcharge fee, that would be an extra $12 you'd need to fork out.

So, when it comes to paying for goods or services, are card surcharges and other costs avoidable, and are businesses legally obliged to offer a no-cost option? Here's the lay of the land.

Businesses can set the terms

From a customer's perspective it may only seem fair that a business would offer at least one free method of payment, but according to the Australian Competition and Consumer Commission (ACCC), the choice is entirely down to the business.

On its website, the watchdog states that: "Businesses can choose which payment types they accept. However, businesses should be clear and upfront about the types of payments they accept, and the total minimum price payable for their goods and services."

The ACCC does make it clear that if there's no payment option available that doesn't come with a surcharge (e.g. cash), then businesses need to include that surcharge as part of the displayed price.

For example, if a café was selling a sandwich for $10 and the lowest surcharge available was 20 cents when using a debit card, then the sandwich price would need to be displayed as $10.20.

What about cash though? After all, coins and notes are legal tender, and they're a relatively free form of payment if you can avoid any bank account or ATM fees involved with using and withdrawing cash.

As Gerard Brody, chief executive of the Consumer Action Law Centre explains, like other forms of payment, it's perfectly legal for businesses to choose whether or not they want to accept cash.

"It's not a general obligation on all businesses to provide a no-cost payment option. It's certainly good customer service, but aside from some specific sectors, it's not a general obligation," he says.

"And there's certainly not an obligation on them to accept cash. I think that's something we saw a lot of during COVID where businesses started saying 'no, we're not going to accept cash, we're only going to accept card payments.'"

What about rental payments?

One sector which does have slightly different rules is the rental sector. The laws governing rental payments vary between the states and territories, but most include provisions to ensure that renters either have at least one no-cost option to pay their rent (e.g. New South Wales), or a choice between multiple payment options (e.g. Queensland).

While having choice may sound good in practice, it doesn't always translate that way for renters. For example, unlike having access to direct debit or BPAY which are generally available to customers paying their regular energy or internet bills though, a common no-cost option provided to renters is a cheque which needs to be delivered in-person.

That can present an issue - not only because rental offices are typically only open during office hours, but because most people simply don't use cheques anymore.

And in the absence of relatively inexpensive payment options like direct debit or BPAY, some rental agents are encouraging renters to use third-party online payment services which typically come with monthly fees and other costs attached.

"We know more and more tenants who are contacting us or talking about third-party rent payment services and raising concerns around their lack of choice," says Jemima Mowbray, policy and advocacy manager at the Tenants' Union of New South Wales.

"As a renter you are often forced into the situation of choosing a third-party rent payment service because the other options are free, in theory, but are not actually practical.

"In a lot of ways there are basic protections in our tenancy laws though, but it comes back to the fact that renters aren't always empowered to assert their rights because they fear eviction or losing the new tenancy that they've just secured."

This sentiment is shared by Brody, who says that in the absence of convenient alternatives, online payment systems which charge fees go against the spirit of the legislation and merit closer scrutiny from regulators.

"Particularly for essential services like rent and utilities, people should not be charged additional costs for paying their bill. It doesn't seem fair to impose that s on people, particularly during this period of high living costs and inflationary pressures."

Get stories like this in our newsletters.