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Limits on credit card surcharges proposed

09/06/2011

The Reserve Bank’s Payments System Board may allow Visa and MasterCard to introduce rules that oblige merchants to limit the level of surcharges applied to payments made with credit cards.

East & Partners found that in December 2010 the average surcharge for MasterCard credit cards was 1.8 per cent, for Visa it was 1.9 per cent, for American Express it was 2.9 per cent, and for Diners Club it was four per cent.

The most common experience of surcharging was in the travel industry, where it is common on the purchase of airline tickets, paying for rental cars and also hotel bills.

While not mentioned by the PSB, the most common excessive surcharge remains on taxi payments – something pioneered by Cabcharge in the 1990s (in spite of card scheme rules).

Source: Banking Day



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