Sydney, July 15
Australia's central bank has proposed banning surcharges on card payments in a move it says will save consumers over a billion Australian dollars every year.
In a consultation paper released on Tuesday, the Reserve Bank of Australia (RBA) said that a review of merchant card payment costs and surcharges found it would be in the public interest to remove surcharging on payments made using eftpos (the domestic debit card network), Mastercard and Visa cards.
It said that Australians currently pay 1.2 billion Australian dollars (768 million US dollars) in card payment surcharges every year and that surcharging is no longer achieving its "intended purpose" of steering customers towards more efficient payment choices as cash usage has declined.
"We think the time has come to address some of these high costs and inefficiencies in the system," RBA Governor Michele Bullock said at a press conference.
Under current rules, businesses are prohibited from imposing a surcharge greater than what it costs to accept a specific payment type. According to the RBA, eftpos and debit cards are typically less expensive for merchants to accept than credit cards, reported news agency.
However, its review found that businesses are increasingly charging the same surcharge rate across all cards.
"Removing surcharging would make card payments simpler, more transparent and help to increase competition in the card payments system," it said.