The RBA is finalising a new surcharging standards which it hopes will stop businesses imposing excessive credit card charges on customers
Under the proposal, credit card providers such as Mastercard or Visa will be able to restrict the amount businesses charge customers for transactions on their cards.
RBA assistant governor (financial system) Malcolm Edey said on Tuesday that a draft revision of surcharging standards was in the final stage of consultation.
He said the new standard would limit the surcharge imposed on customers, though it may not necessarily be capped at the cost of the transaction.
Dr Edey said he hoped the changes would lead to lower transaction costs for businesses and consumers.
He said credit card providers would be able to take action against businesses that imposed excessive surcharges on customers while still allowing businesses to recoup the costs of transaction.
'In that way I think it strikes a reasonable balance and it should strengthen the incentive for schemes to compete in lowering their fees to merchants,' he said.
'The less a scheme costs to merchants, the lower will be the permissible surcharge.'
Dr Edey said there was anecdotal evidence that some businesses were imposing a surcharge above the cost of the transaction.
Some businesses were levying the same fee on consumers for low-cost cards as those with high-cost cards and that others had imposed a surcharge that was simply well above the cost of the transaction, he said.
'Although these practices do not appear to be widespread, they are of concern from a payments-efficiency point of view because they can distort consumer choices about the payment methods that they use,' Dr Edey said in a speech in Sydney.
'They go against the principle I stated earlier of allowing the efficient flow of price signals to the economic decision-maker.
'It is for these reasons that the (Reserve) Bank reopened consideration of the surcharging standard last year.'
source: http://www.skynews.com.au/national/article.aspx?id=731053&vId=
