Gov. targets unfair credit card surcharges

[yohy?!]

Shops, cabs, and other merchants will be banned from imposing unfair surcharges on credit cards

Read more: Turnbull government backs Murray Review, setting up major overhaul of Australia's financial system

Nice - this gets my vote, my local bottleshop does this now with a 0.5% card surcharge which is basically painless. End the gouging!

 

[Dr Ralph]

How many times have we heard this same story before?

 

[Mattg]

I thought the RBA tried to solve this several years ago. Hopefully this will finally fix things.

Will any such legislation also ban "booking and service fees" that are only imposed when paying by credit card, but are "not related" to credit card merchant costs (according to the airlines)?

 

[Dr Ralph]

Will any such legislation also ban "booking and service fees" that are only imposed when paying by credit card, but are "not related" to credit card merchant costs (according to the airlines)?

Whilst it should, I'd be 99% sure that it wont.

 

[burmans]

I thought the RBA tried to solve this several years ago. Hopefully this will finally fix things.

Will any such legislation also ban "booking and service fees" that are only imposed when paying by credit card, but are "not related" to credit card merchant costs (according to the airlines)?

RBA cant "solve" without legislative backing!

 

[Milefest]

We think that consumers are entitled to a very fair deal here ... to get exactly what they are being represented to be getting, which is an additional charge that recovers no more than the merchant's costs,

Malcolm Turnbull [Source]

Could this mean an end to airlines' excessive credit card fees?

 

[Dr Ralph]

Could this mean an end to airlines' excessive credit card fees?

Wishful thinking.

 

[exceladdict]

My issue with this is that legislating a maximum encourages people to charge the maximum.

I fear we'll see more and more businesses passing on the surcharges now. Only takes one major supermarket or department store chain to start it and the rest will follow.

 

[Milefest]

My issue with this is that legislating a maximum encourages people to charge the maximum.

I fear we'll see more and more businesses passing on the surcharges now. Only takes one major supermarket or department store chain to start it and the rest will follow.

I can't see that happening. I go out of my way to avoid businesses that have an eftpos minimum or surcharge and I know a lot of others that do too.

Commonwealth bank has prohibited merchants that use their terminals to impose a minimum and add unreasonable surcharges, it's good to see banks taking action as well.

 

[yohy?!]

RBA cant "solve" without legislative backing!

regulation is being introduced to phase in by July next year - ACCC will be charged with policing

 

[basso]

regulation is being introduced to phase in by July next year - ACCC will be charged with policing

It might work if

• the RBA is kept out of it. They are the problem, and are incapable of being part of the solution.
• anything that looks, smells, tastes or quack like a credit card surcharge, is defined as one, despite what the unethical businesses call it
• there is proper enforcement
• transgressors are hit, and hit hard. I'd say hit them hard. Count every transaction they overcharge on as an offence.
• Hold the directors and CEOs of transgressing companines personally liable. Make it a criminal offence for them. Throw them in jail. Throw the key away. Remove their ability to run comapnies. Cancel any share options they have.

 

[yohy?!]

It might work if

• the RBA is kept out of it. They are the problem, and are incapable of being part of the solution.
• anything that looks, smells, tastes or quack like a credit card surcharge, is defined as one, despite what the unethical businesses call it
• there is proper enforcement
• transgressors are hit, and hit hard. I'd say hit them hard. Count every transaction they overcharge on as an offence.
• Hold the directors and CEOs of transgressing companines personally liable. Make it a criminal offence for them. Throw them in jail. Throw the key away. Remove their ability to run comapnies. Cancel any share options they have.

you're definetely right but this is a liberal government remember? the 'transgressing companies' would be their core consitutents and in some cases donors...

 

[psi999]

My issue with this is that legislating a maximum encourages people to charge the maximum.

I fear we'll see more and more businesses passing on the surcharges now. Only takes one major supermarket or department store chain to start it and the rest will follow.

One step closer to passing on additional surcharges for Platinum & Signature / Super premium Visa/Mastercards as well.

 

[travelislife]

This just shows the 'free market' doesn't always work. Now I could get some of this wrong, but this is my understanding. There used to be no surcharges, business weren't allowed to. Then the legislation was changed to allow it. Of course some business then used that to start gouging. In industries where there isn't competitors (i.e. the airlines) the consumer has no choice. But other industries, like restaurants etc. I will go elsewhere because of it.

The thing is that the big banks want you to use your credit card. They don't want people to start going back to cash. So they wouldn't want the supermarkets and the like putting surcharges on cards.

 

[trippin_the_rift]

Notice that they stay away from using the words 'limiting he costs to the actual merchant fee'? By saying the costs should only reflect that of accepting cards it does nothing to remedy the current situation which has similar wording thanks to RBA. For example if my merchant fee is 1% but I have to pay my accountant $10m/year to manage the card payments account , this may represent 8% overal and therefore 8% is fully justified and legal.
In my opinion the wording needs to limit to the actual merchant fee or a ban on them all together and let businesses work it into the cost

 

[Milefest]

Notice that they stay away from using the words 'limiting he costs to the actual merchant fee'? By saying the costs should only reflect that of accepting cards it does nothing to remedy the current situation which has similar wording thanks to RBA. For example if my merchant fee is 1% but I have to pay my accountant $10m/year to manage the card payments account , this may represent 8% overal and therefore 8% is fully justified and legal.
In my opinion the wording needs to limit to the actual merchant fee or a ban on them all together and let businesses work it into the cost

They could have increased the fee before this announcement anyway, but they haven't. Most likely because you (and others) would go to a different accountant that is smart enough to incorporate most of the fee into the cost of the service. I've found merchant fees incredibly arbitrary anyway and so many places don't even have them anymore.

 

[trippin_the_rift]

They could have increased the fee before this announcement anyway, but they haven't. Most likely because you (and others) would go to a different accountant that is smart enough to incorporate most of the fee into the cost of the service. I've found merchant fees incredibly arbitrary anyway and so many places don't even have them anymore.

Banks likely don't want the change either because it will reduce what they make and make business banking more transparent. For example I own a hardware store and I know my merchant fee is .8% whereas the guy down the road with a similar business/turnover might be on 0.6% and it might be enough for me to switch my banking.

 

[eastwest101]

Banks likely don't want the change either because it will reduce what they make and make business banking more transparent. For example I own a hardware store and I know my merchant fee is .8% whereas the guy down the road with a similar business/turnover might be on 0.6% and it might be enough for me to switch my banking.

Exactly this - if they ever brought in portable BSB and account numbers then we would really see businesses shopping around and driving a harder bargain with the banks. Would be a most welcome addition to a competitive banking environment which could bring down the cost of doing business in Australia.

 

[moa999]

I can very much see differential charging for premium vs basic cards.

Still won't stop the booking + credit card fees (Airlines, ticket vendors, taxi payments) and Uber at 20% (albeit taken off not added on)

 

[Pleb Status]

Ban all credit card surcharges. It is just a cost of doing business. If a merchant does not want to pay the bank costs, do not accept credit cards (or at least high cost ones like AMEX).