The Australian government will stop merchants from imposing excessive credit card surcharges under legislation being introduced in response to a key recommendation from the Murray Financial System Inquiry.
Prime minister Malcolm Turnbull and treasurer Scott Morrison announced today that the ACCC will be made responsible for enforcing the surcharge regulations, ensuring consumers are not overcharged when paying by card.
Morrison said the Coalition will work with stakeholders on the legislative response and phasing of the implementation by mid-2016.
The government’s “two-pronged” strategy, which targets merchants and protects consumers, will ensure credit card users are not gouged by fees as high as 10% at the checkout.
Morrison said banks had surcharge fees of between 1% and 2%, while the use of other cards incurred 2-3% charges and some were as high as 10%.
“It will have to pass the fair dinkum test – it has to be about the fair dinkum cost of what someone is actually absorbing and passing on,” he said.
Turnbull reiterated that “businesses are free to charge their customers what they liked in a competitive market” but the current situation of card surcharges were “well in excess of the real cost”.
Also outlined in the government’s response, a Payments System Board will established to address problems with interchange fees and provide clarity around what constitutes excessive customer surcharges on card payments.
The government will continue to monitor developments in the payments system, in particular surcharging arrangements, and assess whether further action is required.
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