Card-fee absorption and the surcharge reforms

The rules on charging customers for the cost of accepting card payments are changing under federal (RBA/ACCC) reforms, though the exact timing is still being confirmed. The headline is that you'll need to be more careful about where surcharges are allowed, what they can be, and how they're disclosed. Karven has the expected rules baked in, but you need to make a few decisions about how you want to operate.

What's actually changing

The current rule (and it's been the rule since 2017) is that you can surcharge to cover your actual cost of card acceptance, but no more, and you must disclose it.

Once the reforms take effect (timing still being confirmed):

• Surcharging on debit cards (eftpos, debit Visa, debit Mastercard) is expected to be banned outright.
• Surcharging on credit cards is still allowed at cost, but with tighter substantiation requirements.
• "Cost" must reflect your actual blended rate, not the schemes' rack rates.
• Disclosure must be upfront, in writing, before payment is taken.

The intent of the change is to stop businesses surcharging customers for using their everyday transaction account (which is essentially free for the merchant via eftpos) at credit-card rates.

Karven's options

In Settings → Payments → Card fees, you have three settings:

1. Absorb all card fees. Customer pays the headline price, you absorb the Stripe fee out of your margin. This is the simplest and the cleanest from a compliance standpoint. Recommended for most residential trades.
2. Surcharge credit cards at cost. Customer paying on a credit card sees a "+ 1.7% card surcharge" line. Customer paying on a debit card pays the headline price. Karven detects the card type in the Stripe Elements form and applies (or doesn't apply) the surcharge automatically.
3. No card option, bank transfer only. Customer can only pay you by bank transfer. No card fees on either side. Slower, but zero cost.

You can mix per quote. Some operators absorb on small jobs and surcharge on large commercial ones.

What "at cost" actually means

Your actual cost on Karven (via Stripe) is:

• AU credit card: 1.7% + 30c
• International card: 3.5% + 30c
• AMEX (if enabled): 3.5% + 30c

Karven calculates the surcharge as a percentage that, when added to the headline, results in exactly the Stripe fee being passed through. On a $5,000 deposit, that's $85 + the 30c flat fee, Karven shows it as a clean "+1.7%" surcharge for AU cards.

You're not allowed to round up. You can absorb (charge less than cost) but not over-charge.

Disclosure

Karven handles disclosure in three places:

1. On the quote PDF. A line under the total: "Card payments may incur a 1.7% surcharge on credit cards (no surcharge on debit). Bank transfer is free."
2. On the portal payment screen. Before the customer enters their card details, Karven shows the surcharge that would apply for their card type, with a clear breakdown.
3. On the receipt. The receipt itemises base amount, surcharge, and total.

You can edit the wording (Settings → Payments → Disclosure text) but you can't remove the disclosure.

What about the deposit?

Deposits get the same treatment as final payments. If your default is "absorb", deposits are absorbed. If your default is "surcharge", deposits carry a surcharge that's calculated at deposit time.

For multi-stage jobs (deposit, progress payment, final), the surcharge applies on each stage independently.

What about Tap to Pay?

Tap to Pay (in-person card acceptance through your phone) has the same Stripe fees and the same surcharging rules. Karven applies your surcharge setting in the tap flow as well.

What if a customer objects?

Some will. The right move is to honour the objection, drop the surcharge for that customer and absorb it. It's a margin hit but it's not material on a one-off basis, and the customer feels heard. Karven supports a one-click "absorb for this customer" override on the payment screen.

A practical recommendation

For most residential trades, absorb all card fees. Here's the maths:

• Average residential job: $5,000.
• 1.7% card fee: $85.
• Time spent explaining a surcharge to a hesitant customer: 5-10 minutes.

The $85 is cheaper than the awkward conversation, and the awkward conversation can be the thing that pushes a customer to "let me think about it". For commercial work where the customer's accounts payable team isn't going to push back, surcharging is more defensible.

What Karven won't do

Karven won't implement a "card processing fee" or "convenience fee" that doesn't reflect your actual cost. The product simply doesn't let you set a surcharge higher than your blended Stripe cost. This is by design, it keeps you on the right side of the law, and it keeps your reputation clean.

Audit trail

Every payment in Karven records the base amount, the surcharge (or lack of one), and the disclosure text that was shown to the customer. If the ATO or ACCC ever wants to see the receipts, you've got them.