Melbourne gym owner slams dishonour fees charged by payment service providers

Jonathan Quieros, owner of Melbourne’s Dukes Gym, has slammed dishonour fees of up to $35 per failed transaction being charged by payment service providers.

Speaking to Yahoo Finance, Quieros said he wants dishonour fees banned, explaining that members  often made an “honest mistake” but were hit with dishonour charges that can be more than the gym membership fees themselves.

He advised “we’ve got well above 1,000 members across two different clubs. There’s always going to be a percentage of those people that don’t have funds in their account, need to update their details, or whatever reason that the transactions are not going to go through.

“It’s happened to myself personally. A lot of the time, these are just honest mistakes that people are going to have at some point. So, to be penalised so much for something like that is just a bit unreasonable.”

Quieros said his previous payment processor charged dishonour fees of up to $22 per transaction, which were passed on to customers along with any dishonour fees charged by their bank.

He sees that Australian can pay up to $500 a year in “sneaky” fees charged by payment platforms and banks.

While the fees are charged by payment platforms, Quieros said he was the one that had to field the blame from customers.

Dishonour Fees
Research by payments provider GoCardless found dishonour fees charged by payment platforms - incurred when a payment fails, usually due to insufficient funds or an error in payment details - can be up to $35 per failed transaction.

Stripe charges dishonour fees of just $2.50 for its retail consumers, but other payment service providers like EzyPay charge failed payment fees ranging from $14.90 to $35 per failed transaction.

EziDebit charges customers $29.90 and merchants $9.90, Xplor’s DebitSuccess platform charges customers $14.95, Pay Smart up to $15.90 and Pay Advantage $4.95.

Banks can also charge dishonour fees on top of this.

Commonwealth Bank typically charges $5 per failed direct debit transaction, while ANZ charges a $6 dishonour fee on certain transaction accounts.

Westpac and NAB don’t charge dishonour fees but overdraft fees can apply.

GoCardless’ survey of more than 1,000 respondents found 87% of respondents thought dishonour fees should be banned or limited, with 76% believing the charges were “unfair”.

Nearly a third of people had been charged dishonour fees in the last year, with half paying up to $50 a year and the other half charged anywhere from $50 to $500 over the year.

With such surcharges under the spotlight from the government, GoCardless ANZ acting General Manager Kyle Willersdorf has called on the government to “step in and stamp out” dishonour fees as well.

Claiming that dishonour fees charged by payment service providers were not related to the actual processing cost, Willersdorf advised “these fees are generally unfair, but disproportionately impact vulnerable Australians, often triggering overdrafts, further bank charges, and can lead to debt.

“It's a slippery slope that can quickly escalate into serious financial distress. We believe dishonour fees are unethical, unfair, and exploitative.

“They should never be treated as a revenue opportunity, and frankly, they have no place in a fair payments system."

Dukes Gym operates clubs in the Melbourne suburbs of Abbotsford and Richmond.

Images: Melbourne’s Dukes Gym (top) and owner Jonathan Quieros (below).