The surcharging debate
The Zeller transaction fee for card terminal sales is simple: one flat rate for all cards, which has remained at 1.4% since the launch in 2021. The rate undercut Square’s transaction fee as well as the PayPal card reader, which has since exited the Australian market. Launching during the Covid-19 lockdowns, when many businesses were struggling, made the competitiveness of Zeller’s fees even more compelling.
Merchants can choose between covering the fees themselves or passing them on to the customer as a surcharge. Surcharging is fairly common throughout Asia. It is a trend Pfisterer says is increasing among their customers.
“It is a commonly used feature of Zeller Terminal, yet we aren’t building our business around it – you can choose to use it, switch it on and off as it suits, or surcharge only part of the fee. We feel strongly that this should be the decision of the individual business and for this reason, don’t prescribe one approach.”
With some negative chatter among consumers on social media about surcharging, we had to ask if the trend had gone too far in Australia, to the point where businesses risk putting customers off. Pfisterer notes that surcharging is divisive, but also points out:
“There is an argument to say that it provides a degree of transparency. Ultimately, all costs incurred by businesses need to be recouped in their pricing, so whether it’s blended into the cost of the item or added as a surcharge, the result is the same.
Due to the overall increase in the practice, I don’t believe business owners should be concerned about putting customers off. Big businesses like Aldi have been applying surcharges for years. Australian consumers are becoming more familiar with the practice.”