It's a practice which is done all over the world, unfortunately. Europe is quite notable.
Then you have societies like in Japan where credit cards are actually much rarer than in Australian society. (Flights, hotels etc. are mostly OK, but several restaurants except for really high end ones may not accept credit cards at all).
And how do you apply a surcharge to a cash transaction? How do you suppose to avoid the surcharge in a case like that (unless the cash method is surcharged and the non-cash ones are not, in a weird role reversal)?
Although the premise of the article is fine, I smell there's a degree of misinterpretation and mishandling of the data and analysis between the retailers surveyed, the research consortium and the media.
It is not overly surprising that the research finds that most people will still "finish" a transaction even if they are not fully aware of the credit card surcharge before the time of payment. Obviously, that comment is not necessarily representative at all of the member collegiate on this forum.
I suppose one can argue that even if the surcharge amount is 0.81% for Visa/MC, then that is purely the cost of the business to the bank/card company for processing such amounts. It does not cover the administrative costs of such arrangements, e.g. the payment infrastructure, the time required to examine and reconcile the paperwork related to credit card transactions (if that is such an action required when one decides to utilise a credit card payment system).
In the cases of fixed surcharges rather than percentage based ones, such as with airlines, that has been argued as one of either: (a) reflective of a different method of how credit card companies charge these companies (i.e. based on dollars per transaction rather than a percentage), or (b) the fixed amount results in higher than 'equal' charges for some people but lower than 'equal' charges for others.
Also, what's the deal on minimum amounts? If someone walks into a store with no minimum and pays for an item which is valued at 50c, what does the credit card company get? 0.81% of this amount (which is 0.405c), or a fixed minimum (e.g. $2 per transaction or 0.81%, whichever is higher), or is it simply aggregated over a period (e.g. day, week, month - and say an administrative/handling charge of $500 per month or 0.81%, whichever is higher)?
In the end, most of us who are proponents of card use without surcharging and wider acceptance of Amex feel it is detrimental to the perceived reputation of a business not to offer better payment options and/or absorb these costs into the business rather than passing it explicitly** onto the customer.
I'd really like to see what are the comparisons of a full cost cycle analysis between payment by credit card, debit card and cash. So not just the point expenses like administrative "cuts" to the card companies, but also including, for example, cash handling expenses.
**This is important to distinguish. For example, Hilton (and later other hotel brands) Australia started a 1.5% credit card surcharge on bills settled at the desk. Most of us on AFF and FT of course looked at the decision with considerable contempt. Now had Hilton instead increased their hotel room rates across the board, say by $5-$15, and suppose they instituted small increases in their miscellaneous chargeable items, would people have expressed an equal level of contempt?