ACCC urges consumer vigilance regarding card charges
The Reserve Bank of Australia has introduced new standards regarding the size of card surcharges and tasked the ACCC with enforcing these new restrictions.
The reforms are expected to recoup some of the $1.6 billion Australians spend every year on surcharges when making a purchase by credit or debit card.
Under the new rules, retailers will no longer be able to force the consumer to pay a surcharge that is higher than the cost of processing the card transaction.
Debit card surcharges will be reduced from 12 to 8 cents per transaction, and the surcharge for regular credit cards will be capped at 0.5 per cent (the surcharge for premium Visa and MasterCard users will be capped at 8.0 per cent).
The brand new rules are expected to affect Eftpos, Debit MasterCard, MasterCard Credit, Visa Debit, Visa Credit and American Express cards.
In an interview with News.com.au, ACCC chairman Rod Sims said, “There are two upshots for the consumer. The most basic one is that consumers won’t get slugged for credit card surcharges that are above the cost to the retailer. The second and very important one, is that it will make it harder for companies such as airlines and ticket booking agencies to hide fees later down in web pages.
“There’s less incentive for drip pricing if all they can do is recover their costs.”
The new restrictions will commence on the 1 September 2016 for ‘large retailers’ and on 1 September 2017 for other merchants. A large retailer is defined as having a gross revenue exceeding $25 million or employing more than 50 people.
Consumer advocate Christopher Zinn, who spearheaded a campaign to eliminate surcharges, welcomed the announcement but said, “Uncertainties remain around surcharging card payments for smaller everyday consumer purchases. Additionally, the RBA guidelines do not engage with consumers’ negative feelings toward surcharging or the detrimental impact the practice can have on customer loyalty and advocacy for businesses of all sizes.”
Do you think it’s reasonable for retailers to have a surcharges for purchases made by card? If so, what should the surcharge be?
Share your thoughts in the comments.
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