Consumers look set to save hundreds of millions of dollars in credit card surcharges following rule changes by the Reserve Bank.

The changes give credit card companies the power to limit surcharges that around a third of merchants add to bills when customers pay by credit.

The card companies will be able to limit such surcharges to the amount that it actually costs the merchant to process the transaction, which for Visa and MasterCard is estimated as averaging around 0.86 per cent of the value of the transaction.

For American Express and Diners Club, consumer group Choice says cost recovery fees should only be around 2 per cent of the transaction value.

Choice's head of campaigns, Matt Levey, says that is far lower than the surcharges charged by many merchants, such as a 10 per cent fee on taxi fares and flat fees charged by many airlines on credit card transactions.

"What might initially seem a pretty cheap flight - $70 ticket from Sydney to Melbourne - would then attract a $17 surcharge, which is a pretty staggering 24 per cent," he told ABC News Online.

Mr Levey says some credit card surcharges have been spiralling out of control since being introduced in 2003.

"That was initially, I think, a recognition that there's an extra cost associated with using credit cards, and it's fair enough that that cost is recovered, and not essentially cross-subsidised by consumers who choose not to pay with credit cards," he said.

"But, unfortunately, what we've seen in the period since are surcharges which go beyond simply cost recovery and actually become an extra means of revenue raising."

Outlaw

Electronic payments provider Tyro says consumers stand to save hundreds of millions of dollars in excessive fees if card companies all act to limit merchant charges.

"If all credit card companies follow Visa and outlaw excessive credit and debit card surcharging, it will save the Australian consumer an estimated $350 million a year," Tyro Payments chief executive Jost Stollmann noted in a statement.

He says around two thirds of merchants currently choose not to add a credit card surcharge, instead absorbing the cost of providing card transactions themselves.

Mr Stollmann says Visa informed his company 11 days ago that it was going to act to restrict surcharging to as little as 1 per cent, but he says many retailers may still be unaware of the change.

"How are retailers going to prepare for the change, adjust their systems and train their staff in time to avoid breaking their obligations under their contracts?" he asked rhetorically.

"How will retailers deal with customer complaints about surcharging, when they have not been given time to prepare for the change?"

Tyro warns that retailers could face warnings, fines or contract termination from the credit card companies if they charge more than is reasonable to recover their costs.

The Commonwealth Treasurer, Wayne Swan, says other credit card companies should follow Visa's example and act to restrict merchant fees.

"I think Visa has really thrown down the gauntlet to the other major credit card providers, and I'd encourage them to follow suit by banning excessive surcharges for their customers too," he said in a statement.

Mr Swan says the Government has already instituted changes to ban over-limit fees and ensure that credit card repayments are allocated to the highest interest rate debts first.

Choice is urging consumers to lodge a complaint with them, the merchant and their bank if they are charged excessive credit card surcharges.