Credit card surcharges over the top and must be reined in

Consumers pay more than they should
 
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01.Credit card surcharges need transparency

Consumers pay more than they should

Too many retailers are using credit card surcharges as a revenue stream and CHOICE wants the practice stopped.

How it all began

Beginning in 2003, the Reserve Bank of Australia (RBA) allowed retailers to start passing on surcharges to customers to cover administration costs. Credit card payments cost more to administer than other systems of payment, such as EFTPOS or debit cards. Surcharging was meant to end the cross-subsidisation of credit card payments by non-credit card users. As a result, the move was generally supported by CHOICE.

The situation now

Since 2003, surcharging has turned into a potential revenue stream for many retailers. Consumers have expressed concern about the level of surcharging from companies such as online retailers, airlines, telcos, utilities and taxi companies. At the same time, merchant fees have dropped but there’s no evidence of those savings being passed on to customers.

What does CHOICE want?

CHOICE wants the rules changed so that surcharges reflect the direct cost of the transaction, which means no more cream on top for those excessively surcharging. We also want retailers to provide clearer information about surcharges when consumers make an online purchase. The people’s watchdog also wants the RBA to collect and publish more data about surcharging practices and to establish rules requiring a single surcharge for each transaction, rather than separate surcharges on separate items.

More information

You can find out more about CHOICE’s position on credit card surcharges, including the submission being made to the RBA review.

 
 

 

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