CHOICE welcomes final RBA standards and guidance on what consumers should pay in card surcharges.
Today’s Reserve Bank’s (RBA) announcement about what makes for a reasonable credit card surcharge shows the era of sky-high surcharges should soon come to an end.
While the revised timetable for the new reforms means that consumers may still be slugged with unfair surcharges over the New Year sales season, consumers will benefit from these changes from 18 March 2013.
“The RBA is clearly saying that surcharges should be set at what retailers are paying their banks to accept card payments and that in most cases this should be around the level of the merchant service fee,“ says Matt Levey, CHOICE Head of Campaigns.
“We know from the RBA’s own data that retailers are being charged by their banks an average of around 0.87% for MasterCard and Visa, 1.84% for American Express and 2.10% for Diners Club.1
“From 18 March 2013, consumers should expect to see surcharges limited to around these levels, and if they see anything much higher, they should tell their bank or card provider,” says Mr Levey.
The RBA has also made special mention of the taxi industry, where Cabcharge’s so-called 10% ‘fee on financial services’ received a recent CHOICE Shonky Award.2
The RBA noted the findings of the Taxi Industry Inquiry in Victoria, which estimated the total cost of accepting card payments in taxis at around 5%.3
“Whether Cabcharge wants to call their 10% hit a ‘surcharge’ or a ‘fee on financial services’ or anything else, the writing is well and truly on the wall,” says Mr Levey.
“It’s time to stop slugging consumers with unjustified fees for using credit cards.”