Credit card surcharges get the flick
Sat August 18, 2012 12:00am
AUSTRALIANS have about four months left of hefty credit card surcharges before merchants will be banned from slugging customers.
Airlines, retailers and taxi companies will be among those who will be forced to change their ways under new legislation, with merchants only allowed to charge fees that are "the reasonable cost of card acceptance.''
Consumer group Choice head of campaigns Matt Levey said he's "optimistic'' the changes will remove the exorbitant fees associated with paying on plastic.
"We'll be very keen to see some of those notorious surcharges brought back down to earth after January 1,'' he said.
"But between now and January 1, Aussie consumers are still going to have to put up with paying too much to use credit cards.''
The Reserve Bank of Australia held an inquiry into surcharging last year and found in December 2010 the average surcharge for MasterCard credit cards was 1.8 per cent, Visa was 1.9 per cent, American Express was 2.9 per cent and Diners Club was 4 per cent.
Mr Levey said banks charge retailers an average merchant service fee - the cost to accept card payments for Visa and Mastercard - of about 0.86 per cent.
In 2011 Australians spent $235 billion on credit and charge card purchases and approximately 30 per cent of those transactions attracted a surcharge.
The airlines are among those under the biggest scrutiny for slapping over-the-top surcharges onto booking costs.
Virgin Australia has a credit card fee starting from $4.50 for domestic travel per person per flight which they argue covers costs at their end for the transaction.
"Our card fee has been designed to be a flat uniform fee for all guests,'' a spokesman said.
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