The government is currently overhauling Australia’s financial system, in a bid to make it more resilient to any future financial crisis we might face. One of the main reforms currently being pushed by Turbull’s government is increased regulation of the surcharges that merchants are allowed to charge on credit card transactions. It seems excessive fees are finally being kicked to the kerb.
This issue is something we often address on Ask Lifehacker. Credit card surcharges in Australia often reach unreasonable amounts despite the presence of consumer protection rules.
Regulations introduced in 2012 allowed Visa and Mastercard to restrict the level of surcharging that merchants could demand while accepting their cards, but not even a year later a Choice survey revealed that plenty of customers were still facing excessive credit card surcharges — often with no surcharge-free alternative being offered.
While credit card surcharges will not be eliminated entirely, merchants will no longer be allowed to charge any more than it costs them to accept payment by card, under the proposed regulations.
“Where a merchant charges a surcharge for using a card… that surcharge can be no more than the merchants actual cost,” Malcolm Turnbull said on the new regulation.
These reforms come from a financial system review headed by David Murray, former Commonwealth Bank CEO. The government has decided to back most of the recommendations of the review. Aside from the regulations on credit card surcharges, the new reforms will also mean tighter monitoring of financial planners and their qualifications, a Productivity Commussion investigation of the super system and its related fees, and increased powers for the corporate watchdog ASIC.
“Australia can now be confident that our financial system remains the best in the world,” said Prime Minister Malcolm Turnbull.