For years Australians have been paying over the odds for the convenience of paying by credit card. A new ruling by the Reserve Bank of Australia (RBA) means fairer surcharges will soon be on the cards.
From 1 January 2013, the excessive credit card fees paid to airlines, shops, taxi companies and websites will no longer be legal. The RBA has ruled that companies can only charge a reasonable surcharge which matches the actual cost of processing such transactions.
The inquiry found that large merchants are charging double the actual cost of processing such transactions. The new fees will be limited to covering that of service fees charged by banks, the cost of the credit card terminals, line rental and communication charges.
Currently, banks charge retailers an average of 0.81 per cent of the transaction amount, yet Cabcharge adds 10 per cent to taxi fares paid by card and Qantas charges a flat fee of $25 on international flights, regardless of cost.
Credit card providers, Visa and Mastercard, welcomed the decision which was made after a six-month inquiry into the practice of retailers over-charging and have committed to ensuring the rule is enforced.