RBA official confirms merchants are right to surcharge

Merchants who surcharge based on how much a customer spends in a transaction is justified, as the overheads “can be quite high”, an RBA official has said.

At a law conference this week, the RBA’s Head of Payments Policy Department, Tony Richards, explained that despite popular belief, the cost of card payments for merchants is not a flat fee.

“It turns out that some of the so-called conventional wisdom is quite incorrect,” he said.

“The fact is that the cost of some payment methods to merchants can be quite high and these costs typically increase in line with the value of the transaction.”

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Australians waved goodbye to excessive debit and credit card surcharging earlier this month when the Competition and Consumer Amendment (Payment Surcharges) Act 2016 kicked in.

As Richards also noted in his speech, there was “no denying excessive surcharging in a few industries has been a concern for some stakeholders”.

“A lightning rod here has been the surcharging policies of the domestic airlines,” he said.

Because of the new laws against excessive surcharging, airline carrier Qantas is no longer charging flat fees on tickets, but applying 1.3% credit card surcharges against total bookings instead.

Tips to avoid card fees:

  • Always keep cash in your wallet.
  • When securing flights online, consider paying with Poli or BPAY, as they usually don’t attract booking fees.
  • Pay with EFTPOS, as merchant fees are generally lower compared to paying with credit. Remember to select "savings" or "cheque" at the terminal.

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