It was never totally clear why the cost of accepting a payment — a fairly fundamental part of running a business — was different to other input costs like utilities or labour or marketing. Yet, increasingly, merchants have been levelling a surcharge for that simple function.
Consumers are now paying around $1.2 billion a year in surcharges. In some cases, notably when paying for airfares or buying tickets to events, it is impossible to avoid them.
Two decades ago, the Reserve Bank of Australia (RBA) decided to allow surcharging, believing it would encourage merchants and consumers to adopt cheaper payment mechanisms. That didn’t work.
Today, the RBA has reversed course and will ban surcharges on electronic payments made with Visa, Mastercard and Eftpos. Reflecting the enormous variety of views in the market, the central bank will entertain feedback until 26 August.
