Tired of being slugged an extra fee to use your card?

Published on August 30, 2016 1:45 pm, by

In a win for consumers, new rules are being introduced that limit the value of these fees.  So whilst you might still be asked to pay them by some businesses, you will probably be paying less.

After years of paying crazy surcharge fees for services like booking flights,  the new rules mean businesses can only pass on the cost they incur for processing payments on different cards.

The new Standard will apply to EFTPOS, Debit MasterCard, MasterCard Credit, Visa Debit, Visa Credit and American Express cards issued by Australian banks.

What’s changed?

Surcharges will still exist, however the maximum amount businesses can charge will drop. Businesses will be limited to passing on what it costs them to accept that type of card for that transaction.

This means that fixed amount surcharges are likely to be dropped, with businesses charging a percentage fee.

Where a business wants to charge the same across all types of cards, it will need to be the lowest percentage that they are charged across the different card types they are accepting.

When can I expect to see that’s different?

For large businesses the changes will come in to effect on Thursday 1 September 2016. A large business is one who meets 2 of the following requirements

  • employ over 50 staff
  • have a consolidated gross revenue of $25million or more
  • have consolidated gross assets with a value of $12.5 million or more

For the businesses who don’t meet 2 of the criteria, they have an extra 12 months to implement the changes.

This means by 1 September 2017 we will see consistency amongst credit card surcharging. There will also be recourse if you believe a business is overcharging.

The biggest surchargers in the business – airlines

Anybody who has paid for a flight on credit card will know the exorbitant charges you get from the airlines. These are the domestic flight surcharges we can expect to see go later this week:

  • JetStar $8.50 per passenger per flight
  • Virgin $7.70 per passenger per booking
  • Qantas $7 per passenger per booking
  • Tiger Air $8.50 per passenger per flight

Moving forward we can expect to see the airlines continue to charge a surcharge however it will be a percentage of the cost of the flights in line with the cost they pay to take payment from your credit card.

What about taxis and UBER?

Taxis also charge well above the cost to them, often around 10% of the value of the fare. Taxis fall under state regulation however and recently Victoria, New South Wales, Western Australia, South Australia and the ACT have announced that surcharges will be limited to 5%.

UBER falls under the RBA surcharging rules and as such will be enforceable.

Who will enforce this?

The Australian Competition and Consumer Commission (ACCC) will be responsible for enforcing these rules in the case that a business is surcharging excessively.

If you believe you have been charged too much you will be able to contact them.

Where can I get more information?

The RBA website has quite a bit of information on why these changes are coming in to effect. They also explain different cards, payments, and how businesses are expected to work out the fees that they pass on to their customers. The link below is for the Q&A section, which should cover any questions you may have.

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Jen is an experienced banking professional who loves wine, coffee, finding a bargain and of course her three beautiful children. Since Jen's first budget led her to buy a home at 20, Jen has passionately helped others to make better decisions with their money.

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