RBA takes aim at card surcharges

[shintaro10x]

Lets see if the RBA can fix the mess they are responcible for...

''While there is potentially a large variation in the … costs faced by merchants, justifying significant variation in surcharges, concern has been expressed … that some merchants may be using surcharging as an additional means of generating revenue, rather than simply covering the costs of card acceptance''

Credit card fees | Reserve Bank considers fee cap

THE Reserve Bank will consider capping credit card fees charged by hotels, airlines and taxis amid claims consumers are being hit with excessive charges.
The RBA has launched a review of credit card surcharging, raising concerns that some businesses are using excessive fees to make money rather than to cover the cost of the transaction.
The review marks a return to the landmark credit card reforms pushed through by the RBA last decade, which were designed to make payment costs more transparent while eliminating cross-subsidies.


Read more: http://www.smh.com.au/money/rba-take...#ixzz1OlQurUqj

[awilcockson]

About time ... Of course we all know nothing will come of it.

[lovestotravel]

I'll believe any changes when they happen!!!!

Wake me then

[kpc]

you guys are so cynical.......



































.....but I suspect you are all correct

[thewinchester]

Sweet, delicious irony.

The same group of bankers who thought deregulating the interchange market allowing introduction of merchant service fees to be passed onto the consumer now thinks it was a bad idea and needs fixing.

I've read the RBA's report, and I intend on making a submission on the topic - specially since the RBA seems to be (once again) giving EFTPOS Payments Australia Ltd (EPAL) a free pass here.

EPAL aren't being considered for their merchant service costs, let alone the what I consider criminal protection they pay in the form of substancial "rebates" they pay to big merchants for them continuing to accept. They're also not tacking the fact that these payments and the changes to interchange have permitted merchants to actively discriminate against and decline acceptance of card subtypes within the scheme.

Yeah, I'm taking aim at Woolworths Limited here - but there's a wider issue that needs to be addressed if EPAL wants to be taken seriously on a level playing field for electronic payments.

[fantasy86dj]

It would be really nice if something positive came out of it but the chances......

[oz_mark]

I just had a look through the public submissions (RBA: Submissions on Card Surcharging). Haven't found the one from thewinchester yet.

It would be fair to say that just reading the name of the entity making the submission means you can pretty much guess the arguments within each submission!

[Mal]

I just had a look through the public submissions (RBA: Submissions on Card Surcharging).

Had a read through some of them. The one from the Accommodation Association of Australia's CEO (Richard Munro) http://www.rba.gov.au/payments-syste...ssociation.pdf is probably the strangest one that doesn't match reality. Which dilusional world does he live in?

The Association’s members include major international hotel chains, including Accor Hotels, Mirvac Hotels and Resorts, Toga Hospitality, Mantra Group and InterContinental Hotels Group.

...

Tourism accommodation businesses within Australia do not impose excessive surcharges on customers who pay by credit card for goods and services provided by these businesses.

...

The highly competitive nature of the industry means that the imposition of additional costs on consumers – such as credit card surcharges – is a major decision for an accommodation business.

Similarly, the level of such costs is determined only once a number of factors are taken into consideration, notably cost recovery. Therefore, there is a strong element of self-regulation around fees and charges, including credit card surcharges, in Australia’s accommodation industry.

...

On behalf of the industry, the Accommodation Association rejects any suggestions that tourism accommodation businesses are using credit card surcharges purely as a means of raising extra revenue or “profiteering”.

[shintaro10x]

I just had a look through the public submissions (RBA: Submissions on Card Surcharging). Haven't found the one from thewinchester yet.

It would be fair to say that just reading the name of the entity making the submission means you can pretty much guess the arguments within each submission!

Reading some of those submissions makes me really really angry...

So many tossers out there

How can a 10% surcharge be acceptable...? Or perhaps I am missing something here....

Moving on, Its natural for Visa to have the position below, and this line has been heavily discussed here on AFF and is something I strongly believe is why surcharging above the merchant fee is wrong, wrong, wrong...

Allowing retailers to surcharge forces consumers to pay for the
substantial benefits that merchants receive from accepting cards, which
include greater pools of customers and increased sales, increased
security of payment, lower physical security costs and faster payment
acceptance and settlement times, while generally shifting more than
100 percent of the cost of electronic payments to consumers, with no
regard to these merchant benefits.
Furthermore, surcharging only one payment method – card payments –
has the net effect of completely muting the true cost of other payment
methods. Considering the widely held industry view that the true cost of
accepting payment methods such as cash and cheque are higher or
considerably higher than electronic payment methods, we feel that
selective surcharging in the manner permitted in Australia is deeply
problematic.
Australians paying with a card and paying a card usage surcharge are
effectively also paying the cost of that business accepting other
payment methods, such as cash, which have been absorbed into the
business running costs and thus already form part of the base price of
the good or service that the card surcharge is added to. This is
inequitable, unfair and amounts to an economy wide disincentive to the
electronification of payments.

[albatross710]

Before the RBA introduced the changes I recall the standard merchant rates used to be 4-5%, now we are bouncing around 1%. Good.

Then there is Cabcharge - they need to be brought to account.