Credit card surcharge cap planned

19/12/2011

Visa and Mastercard may be allowed to introduce a cap on the surcharges that merchants can apply to payments made with a credit card or debit card. The RBA's Payment System Board forced the card schemes to scrap these rules in the early 2000s, a step that encouraged many more merchants to apply a surcharge to card payments.

A study by Roy Morgan Research for the PSB puts it at five per cent. And a study by East & Partners cited, by the PSB in the middle of the year, found that around 10 per cent of surcharging merchants apply a surcharge of five per cent or more. The average merchant service fee is around one-fifth of this level.

The PSB said that it had collected further data on surcharging over recent months and concluded that "it is not uncommon to find merchants of many different types applying ad valorem (according to value) surcharges at levels that are significantly greater than would be implied by the distribution of merchant service fees."

Source: Banking Day