Shoppers will no longer be slugged with excessive surcharges on credit card payments under new rules, but could face other fees as banks look to make up for lost revenue.
The Reserve Bank has announced that from September 1, surcharges on card transactions will be limited to the amount it costs a retailer to process the payment.
"Merchants will not be able to impose high fixed-amount surcharges on low-value transactions, as has been typical for airlines," the RBA said.
The new rules will apply to large merchants from September 1, and to smaller merchants from September 1, 2017.
They will put a cap on the interchange fees paid by merchants to the card issuer, which the RBA hopes will in turn reduce overall costs for consumers.
For debit cards, this cap has been reduced to eight cents from 12 cents, while for credit cards it has been put at 0.8 per cent of the transaction.
"The new provisions will limit the amount businesses can surcharge customers for use of payment methods such as most credit and debit cards," Australian Competition and Consumer Commission chairman Rod Sims said.
"The limit will be linked to the direct costs of the payment method such as bank fees and terminal costs."
The new rules will be enforced by the ACCC.
The crackdown on surcharges follows concerns raised by the Murray Financial System Inquiry.
Market intermediaries, however, warn consumers will likely face stiffer fees, just in another form.
"We welcome the RBA's focus on excessive charging and look at this as a positive for consumers," MasterCard's country manager Andrew Cartwright told AAP.
"However, we have seen in the past that consumers are at a loss as financial institutions lok to make up through other fees."
Mastercard called interchange fees a critical component of the payments system, covering the cost of fraud prevention, interest-free days, and guarantees retailers are paid.
Consumer services ratings provider Canstar said the new rules limiting interchange fees will impact credit card rewards programs, as the revenue was used to fund the cost of rewards.
It will also affect the fixed-price costs charged in some industries, including airlines, when credit cards are used to make payments.
Qantas said it was closely involved in consultation on the new RBA standards, which are largely in line with its expectations.
"They allow merchants like Qantas to continue recovering some of the significant, fixed costs that come with enabling payments by card," it said.
At present, Qantas charges a fixed-fee credit card surcharge of $7 for domestic bookings and $30 for international bookings. "This recovers about 80 per cent of Qantas related costs and has never been a source of profit," it said.
Share
