04.How did we get here?
In 2003, the RBA reduced the fees that retailers pay for credit and debit card transactions. At the same time they changed the card scheme rules to allow retailers to add a surcharge to cover their card-transaction costs, rather than charging all customers higher prices.
In reality, however, some retailers introduced excessive surcharges to profiteer on the changes. In 2011 about 10% of large merchants applying a surcharge for Visa and MasterCard credit cards charged three per cent or more, which amounts to a 250% mark-up on the average merchant service fee (MSF) of about 0.86% for those cards.
In 2010, CHOICE teamed up with NSW Fair Trading to research excessive surcharges. As a result of increasing concerns the RBA launched a review in 2011, resulting in the latest reforms.