RBA delivers surcharge win for consumers: CHOICE

CHOICE welcomes reform to end era of excessive surcharging

CHOICE says that today’s announcement by the Reserve Bank is a welcome consumer reform that will bring an end to excessive credit card surcharges.

“CHOICE welcomes the RBA’s clear message that from 1 January next year, the credit card surcharge cash cow can no longer be milked,” says CHOICE head of campaigns, Matt Levey.

CHOICE has been increasingly concerned that some merchants have been cost-shifting, using payment surcharges as a means to raise additional revenue, and in 2010 conducted a joint investigation into surcharging with NSW Fair Trading.

“The overwhelming messages from consumers and from our own investigations are that payment surcharges must be fair,” says Mr Levey.

“Today, the RBA has responded to that message, stating that merchants will only be able to pass on the reasonable cost of card acceptance, essentially ruling out payment surcharges as an avenue for revenue raising.”

“We are now calling on those businesses with the most conspicuous surcharges, such as Qantas and Cabcharge, to justify how these meet the test of reasonable costs.”1

CHOICE has also welcomed the RBA’s announcement that it will look to bring greater transparency to surcharges by publishing more detailed data about the costs of processing credit cards.

“CHOICE looks forward to playing a watchdog role, gathering experiences from Australian consumers and putting pressure on businesses with excessive surcharges to bring them back down to earth,” says Mr Levey.
Read more about CHOICE’s position on credit card surcharges, including the submission to the RBA enquiry.

1For example, CHOICE recently estimated that Qantas may be charging consumers around $100m more in surcharges than they would pay to their bank to process these transactions. See www.choice.com.au/skyhighsurcharges