The days of airlines applying card surcharges up to 1187 per cent more than they should be are over, with the passage of new legislation.
The Competition and Consumer Amendment (Payment Surcharges) Bill 2015, passed in the Senate, will instate tough new laws to end excessive surcharges on card payments.
A statement issued by the office of Treasurer Scott Morrison said the law was an important step in “implementing the Turnbull government’s response to the Financial System Inquiry and providing greater protection for Australian consumers”.
The statement labelled card and other electronic payments as “critical for the efficient operation of the economy”.
The new laws will ensure customers are only charged according to the true amount of a merchant’s costs in accepting payment.
Consumer advocacy group Choice found that the Qantas $7 card surcharge on a cheap flight was 348 per cent more than the likely cost of the transaction ($1.56), while Jetstar’s $8.50 surcharge accounted for a mark-up of 1187 per cent on the likely cost of 66 cents.
“Whilst many merchants do pass on costs fairly, some merchants engage in this practice abusively. Consumers are entitled to a fair deal,” Mr Morrison’s statement said. (Sydney Morning Herald)
The editor of Philippine Sentinel served as Vice President & Director of MBF MasterCard International as an expatriate based in Hong Kong. According to him, “it has always been stipulated in standard Merchant Agreements worldwide that surcharging any amount is illegal and not allowed by both Visa International and MasterCard International.”
The same rule applied during his term of office at Bank of America when he was in charge of credit card operations in the Asia Pacific Region. He could not understand why merchants in Australia are allowed to surcharge customers whenever a credit card is used to purchase goods and services.