A few weeks ago I caught a taxi to the airport for a flight to Canberra. I was on my way to visit the National Information Centre On Retirement Investments (NICRI - a really useful organisation that provides free financial information to consumers), and they'd kindly given me a cabcharge to cover my fare. But unfortunately the docket was past its use-by date, so the driver’s payment machine spat it back. Not to worry, I produced my credit card instead. Just before the driver swiped it, I asked whether there’d be an extra fee. "Yeah mate, the fare is $35 and the credit card surcharge is another 10%."
10% extra just for the pleasure of forking out $35 for a 15 minute taxi ride? No thanks. I paid cash.
The incident played on my mind though, and a few days later I dug around for more information. Could these credit card fees be justified? Or are taxi companies taking us for, well, a ride?
It turns out that the average cost to process MasterCard and Visa transactions is under 1% - just one tenth of what the driver tried to charge me. I spoke to MasterCard and Visa, and they reckon airlines and taxi companies are using these fees as an extra revenue stream and profit centre.
As I boarded the plane I reflected on how it's worth checking for extra fees before paying, and gave myself a little pat on the back. Then I happened to look again at the cab receipt. "Fare: $33. Tip: $2". I can’t help feeling the driver had the last laugh.
You can read more about credit card surcharges and tell us about the fees that get your blood boiling.