Consumer advocacy group Choice is concerned companies like MasterCard and Visa have helped fund research and lobby groups opposing a reduction in bank fees.

A move by the Reserve Bank to reduce so-called interchange rates is being heavily contested by credit card companies.

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Choice campaigns manager Erin Turner said the interchange fees were set by companies like Visa and MasterCard, but collected by the banks.

"Every time you pay by card, the business you're paying pays a fee to their bank, that bank pays a fee to your bank, the fee between banks is interchange," Ms Turner said.

The recent Financial Systems Inquiry recommended interchange fees be lowered and the RBA proposed to reduce average rates from 0.5 per cent to 0.3 per cent.

In its submission to the Senate Inquiry investigating credit card fees, Choice put forward its case for interchange fees to be reduced.

"Interchange fee is a hidden fee. Everyone pays it in some way, and it usually funds things like rewards points, which only a small amount of people get some benefit from," Ms Turner said.

"We think it's time for interchange fees to come out into the open. It's a really opaque and confusing issue.

"Lowering it's going to make costs more obvious for high-end premium cards, and it should be reducing costs for goods and services across the economy."

Choice has told the Senate Inquiry the International Alliance for Electronic Payments receives funding from MasterCard.

"We're really worried that this funding of front groups and funding of well over a decade of research that says consumer interests are aligned with MasterCard and Visa's interests is, at best, putting forward a very selective view of the evidence, and at worst, it's misleading," Ms Turner said.

She likened it to the tobacco company tactics of the 1980s.

"It's one thing for a company to come out and argue for its interests in public. It's another thing to fund groups to argue for you," Ms Turner said.

"To paint this as a consumer issue, when it clearly comes down to the banks profits and Mastercard and Visa's business model."

Tim Andrews from the Australian Taxpayers Alliance, part of an International Alliance for Electronic Payments, said reducing interchange fees would hurt consumers.

"All the evidence from around the world shows that regulating interchange fees doesn't make the costs disappear," Mr Andrews said.

"What it means is that consumers will be slugged with higher interest rates, higher credit card payment annual fees, slashing of their reward programs and slashing of other things that consumers benefit from.

"These are fees that pay for things like fraud protection, and fraud protection is a really important component for credit cards, so unlike some perhaps other fees, this isn't a grab for cash by the industry, this is something that pays for valuable services."

The Senate committee inquiry into credit card fees will continue hearings in Canberra today, with the Australian Competition and Consumer Commission, the Bankers Association and MasterCard expected to appear.