CBA fights against RBA cap on credit card surcharges

Thursday 21 July 2011

Article by Mozo

The Commonwealth Bank of Australia (CBA) is appealing to the Reserve Bank of Australia (RBA) to abandon plans to introduce a cap on credit card surcharges.

CBA criticises proposed credit card surcharge cap

Stuart Woodward, general manager of reputation at the CBA, said in a submission to the central bank obtained by the Australian that the move would prove more beneficial to larger firms.

According to the RBA, merchants and retailers are using surcharges to bolster profits rather than to recoup costs incurred by allowing customers to use credit cards.

"We believe that [the RBA] option will encourage merchants to surcharge up to the capped level, which may be well above their cost of acceptance," Mr Woodward said.

He added that, depending on where the RBA sets the cap, only a small number of merchants could be affected by the decision.

This comes after figures from the RBA revealed that borrowing on plastic rose to nearly $50 billion in May 2011, up 45 per cent on the 2006 data.

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