New credit card fee rules introduced by the Reserve Bank of Australia are set to dramatically reduce the surcharges we pay; particularly when it comes to airlines and other industries that openly take the piss via price gouging. Here are the details.
From September, businesses will no longer be able to charge customers a fixed surcharge fee for credit card transactions under sweeping changes introduced by the RBA. Instead, these charges will be limited to a percentage of the purchase price. Under the new rules, the surcharge amount cannot exceed what merchants pay external providers for accepting credit cards (typically 0.5% to 1.5% of the purchase price). In other words, it must reflect the actual cost to the merchant.
Airline booking surcharges are one of the most prevalent and annoying examples of this practice. From September, you can expect those booking and service fees to largely disappear. (Whether this will mean slightly higher ticket prices remains to be seen.)
The Australian Competition and Consumer Commission (ACCC) will be tasked with enforcing the new rules, so be sure to report obstinate CC gougers to the authority come September 1. (Note: Small businesses have been given an additional year to fall in line, so don’t go mental if the corner store guy is still charging $2.)
On the downside, credit card reward schemes will becomes less generous under the changes. The RBA is putting a 0.8% on the fees banks received from credit card companies during transactions. This is expected to affect the generosity of credit card reward schemes due to cheaper interchange fees translating to less revenue for the banks.