Australians hit with $800m in credit card surcharges, data shows, as Choice says reforms not working

Updated

Australian consumers have been hit with $800 million in credit card surcharges over the past 12 months, according to new data released today.

MasterCard has collated the figures, and says the main offenders are airlines, taxis, major hotels and utilities companies.

The data comes one year after the Reserve Bank (RBA) announced reforms to stamp out unreasonable credit card surcharges.

Consumer group Choice says the figures show the RBA's move to fix the situation has not worked.

"March 18 will mark one year since the RBA introduced long-overdue rules designed to limit credit card surcharges to the reasonable cost of the transaction," Choice chief executive Alan Kirkland said.

"Surcharging should be reduced to a reasonable level, which RBA data shows on average to be less than 1 per cent for merchants processing transactions through Visa and MasterCard."

The figures showed Australian households paid an average of $100 in surcharges during those 12 months.

Choice says no government agency has the responsibility for enforcing the rules, and surcharges remain a "sneaky" way of raising revenue.

You said it When you book a flight over the internet you are given no choice. Paying by credit card is the only option and you have to pay the surcharge, otherwise you can't make the booking. To me this is very wrong! hope4all via story comment The surcharges applied by airlines and some hotels (only the expensive ones) are out of all proportion to the costs incurred; the surcharge applied by Cabcharge is even more ridiculous... losimpson via story comments



The MasterCard figures are based on the estimated value of total credit and debit card transactions that are surcharged in Australia.

A Choice review earlier this year found consumers flying with Qantas from Sydney to Melbourne could still pay 523 per cent more than the average merchant service fee, similar to the 568 per cent they were paying in March 2013.

Almost 45,000 people have signed a petition on Change.org asking Jetstar to drop its $8.50 surcharge fee.

In November, the Federal Government urged consumer agencies to actively monitor credit card provider practices for hidden fees and charges, and to develop protocols to address consumer concerns.

The request, made through the minister responsible for consumer affairs, Bruce Billson, came after a study into credit card surcharges and non-transparent transaction fees found that consumers were dissatisfied with surcharges and fees, particularly in the airline industry.

Know more? Email: investigations@abc.net.au

Topics: consumer-finance, consumer-protection, australia

First posted