01.Surcharges remain excessive
New data has revealed that Australians pay an estimated $800 million in credit card surcharges annually, mostly to airlines. This amounts to an average of $100 per Australian household.
This is despite RBA reforms designed to stop excessive credit card surcharges, which have been in operation since March 2013. Under the reforms, surcharges are meant to be no higher than the “reasonable cost of card acceptance”.
According to RBA data, this should be 1% for merchants processing transactions through Visa and MasterCard.
March 18 marks one year since the RBA introduced long-overdue rules designed to limit credit card surcharges to the reasonable cost of the transaction. Yet companies such as Cabcharge, Qantas, Virgin Australia, Jetstar and Tiger continue to use card fees as a way to raise additional revenue.
A CHOICE review in early 2014 found consumers flying Qantas from Sydney to Melbourne can still pay a staggering 523% more than the average merchant service fee, similar to the 568% they were paying back in March 2013.
A survey commissioned by CHOICE in 2013 also found that close to half of Australians who reported paying a credit card surcharge say they were not offered or made aware of an alternative, surcharge-free payment method.