THE consumer watchdog wants Australian shoppers to “dob in” retailers found to be breaching strict new rules about how much they can charge customers to use credit or debit cards.

The Reserve Bank of Australia has today released its final standard on excessive surcharges, with the Australian Competition and Consumer Commission tasked with enforcing the ban.

Consumer advocates have welcomed the crackdown, which is hoped to rein in some of the $1.6 billion Australians fork out on surcharges each year.

Debit cards surcharges have been reduced from 12 to 8 cents per transaction, surcharges on regular credit cards have been capped at 0.5 per cent, and 0.8 per cent for premium Visa and MasterCards.

Retailers will no longer be able to charge more than the cost of processing the transaction under the new rules, which affect Eftpos, Debit MasterCard, MasterCard Credit, Visa Debit, Visa Credit and American Express cards.

“There are two upshots for the consumer,” ACCC Chairman Rod Sims told news.com.au.

“The most basic one is that consumers won’t get slugged for credit card surcharges that are above the cost to the retailer. The second and very important one, is that it will make it harder for companies such as airlines and ticket booking agencies to hide fees later down in web pages.

“There’s less incentive for drip pricing if all they can do is recover their costs.”

The new rules will be rolled out in two stages. The ban will commence on 1 September 2016 for “large retailers”, and on 1 September 2017 for all other merchants.

Large retailers are defined as either having gross revenue of more than $25 million, the value of its assets is more than $12.5 million, or it employs more than 50 people.

Mr Sims said the ACCC was finalising online guidance material for consumers and businesses, which will provide further information on the ACCC’s enforcement role, what businesses need to do in order to comply, and how consumers can make complaints.

“We would expect that consumers will report [excessive surcharges] to us,” he said.

“Our standard consumer complaints line is effectively a ‘Dob in the Wrongdoer’ line. We will earmark the complaints in some way and follow them up.”

While the focus would be on “education and awareness” in the early stages, the ACCC “won’t turn a blind eye to possible breaches, particularly for those large businesses clearly on notice of these changes”, he said.

Consumer advocate Christopher Zinn, who is spearheading the Surcharge Free campaign, welcomed the announcement but said some uncertainty remained.

“While today’s announcement following the RBA’s review of Card Payments Regulation addresses excessive surcharges in many large industries, uncertainties remain around surcharging card payments for smaller everyday consumer purchases,” he said.

“Additionally, the RBA guidelines do not engage with consumers’ negative feelings toward surcharging or the detrimental impact the practice can have on customer loyalty and advocacy for businesses of all sizes.”

Surcharge Free is encouraging merchants to go one step further than the new guidelines and end payment surcharges altogether.

“As we’ve seen, businesses of all shapes and sizes are benefiting from their decision to not surcharge customers, and with the cost of acceptance being reduced the rewards will only increase,” he said.

The Australian Retailers Association has also welcomed the news. “The ARA has been working with the RBA in seeking to reduce merchant fees and aiming to have credit cards such as American Express and Diners Club regulated,” ARA executive director Russell Zimmerman said.

“The capping of premium card charges at 0.8 per cent and the more regular weighted average benchmark setting at 0.5 per cent will drive lower costs for retailers.

“Retailers do not like passing on surcharges to consumers and where costs are reasonable on payments systems, retailers don’t surcharge. Both parties will benefit from lower costs as a result of these changes.”

frank.chung@news.com.au