The government is currently overhauling Australia’s financial system, in a bid to make it more resilient to any future financial crisis we might face. One of the main reforms currently being pushed by Turbull’s government is increased regulation of the surcharges that merchants are allowed to charge on credit card transactions. It seems excessive fees are finally being kicked to the kerb.
This issue is something we often address on Ask Lifehacker. Credit card surcharges in Australia often reach unreasonable amounts despite the presence of consumer protection rules.
Regulations introduced in 2012 allowed Visa and Mastercard to restrict the level of surcharging that merchants could demand while accepting their cards, but not even a year later a Choice survey revealed that plenty of customers were still facing excessive credit card surcharges — often with no surcharge-free alternative being offered.
While credit card surcharges will not be eliminated entirely, merchants will no longer be allowed to charge any more than it costs them to accept payment by card, under the proposed regulations.
“Where a merchant charges a surcharge for using a card… that surcharge can be no more than the merchants actual cost,” Malcolm Turnbull said on the new regulation.
These reforms come from a financial system review headed by David Murray, former Commonwealth Bank CEO. The government has decided to back most of the recommendations of the review. Aside from the regulations on credit card surcharges, the new reforms will also mean tighter monitoring of financial planners and their qualifications, a Productivity Commussion investigation of the super system and its related fees, and increased powers for the corporate watchdog ASIC.
“Australia can now be confident that our financial system remains the best in the world,” said Prime Minister Malcolm Turnbull.
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6 responses to “Unfair Credit Card Surcharges Might Finally Be Getting The Boot”
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this is all well and good in large populated cities, but what about small region towns and villages where the cafe owner is charged the same amount by the bank as a cafe owner in the city. Most times small towns have to have a higher surcharge just cover the use of EFTPOS
It is not the customers fault if the business is only profitable by charging a few extra cents on credit card purchases.
The cost of a transaction, whether it be cash, credit card, EFTPOS, needs to be taken into account when deciding what you charge for your goods or services. All businesses take into account the cost of employees, premises, utilities etc. (well, they do if they want to stay in business) why should the cost of card transactions be any different?
“But I’m paying cash, why should I be included in that markup?”
Because that’s the way business runs. If it takes half an hour to help a customer decide which widget to buy, you don’t charge them more than the guy who comes in, grabs the widget and pays for it.
Country town businesses don’t pay any more per transaction than city businesses do they? They just have fewer purchases to spread the card cost over.
Meanwhile at the boardroom.
CFO: “Well, now that we won’t have that revenue source, I guess we’ll just have to accept lower product margins. Oh well, let’s just accept it and change nothing else.”
Said no CFO ever.
Sigh.
Right, now lets get started on how we can get rid of ridiculous ATM machine surcharges.
Sure $1 I can live with, but if your only option for miles around is 1 bank atm only and you happen to be with another, I think $3 or $4 is too much to ask for. Or like those pub atm machines. $4.50 surcharge because we don’t belong to any bank. Bloody ripoff.