Non-Direct Debit Fee - Is it legal to charge a fee for not using a preferred payment method?

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Question: iPrimus has recently taken over my previous internet account with Eftel. I pay my monthly bill by Bpay, which is a payment option on their invoice. However, as well as charging a fee for using Bpay, they also charge what they call a ‘Non-Direct Debit Fee’ because they want customers to use direct debit. This amounts to my admin charges being more than half the value of my actual internet fee. My monthly bill, I appreciate, is small at $7.33, but their admin charges are $2.27 for Bpay and $2.68 ‘Non-Direct Debit Fee’, $4.95 in total. Is it legal to charge a fee for not using their preferred payment method?

Answer: It’s not illegal to my knowledge to charge a fee for not using their preferred payment method, but it is annoying. As with all such things, customers have the right to find a new provider that doesn’t charge fees like this. However, there are laws preventing businesses from charging excessive fees to customers who pay by Eftpos (debit and prepaid), MasterCard and Visa (credit, debit and prepaid), and American Express “companion cards” (Amex cards issued through an
Australian financial service provider, rather than directly through American Express). When paying with these options, businesses can apply a surcharge no greater than what it costs the business to
process the payment: generally 0.5–1% for a debit transaction, 1–1.5% for Visa or MasterCard
credit card transaction, or 1.5–2% for an Amex credit card payment.


First time I have seen a company applying a fee for paying by Bpay.
My understanding is whilst fees can be applied for various payment methods, there has to one method available that is fee-free. In this case it is direct debit.

While this is Finder not the RBA or government, it seems a good synopsis.

There is also a Community topic about BPay fees


In Qld a fee free option only applies to paying your rent, this is a requirement under the RTA act.

Businesses can charge a fee for any payment method (except cash I understand) as long as the fee is a reasonable cost of the business to supply that method. Buy Now Pay Later schemes however may have agreements with a business that prohibits a business charging a fee to the customer for using their service eg Afterpay.


That must have been where I heard the fee free option. Rents. Same in Victoria.
For comparison with the original issue, my RSP provides fee free payment for direct debit and Bpay. They charge 0.32 percent for credit card payment by Visa or MC, which for my monthly bill would be 16 cents.


I noticed some of these fees creeping in with an internet company. I will not direct debit as they mucked it up several years ago. I have emailed them (and reminded them) but have not heard if they will remove the fee for “good will” - and because of said stuff up.