If you’re fed up with preparing to pay for something and then being asked to pay extra when you reach for your credit card, relief is at hand. The Reserve Bank thinks it went too far.
It’s ten years since the Bank allowed retailers open slather to impose whatever surcharge the market could bear. On the whole it is pleased with the results. One third of merchants now charge for using cards and at least another third are considering doing so. Visa and Mastercard have cut what they charge the retailers by 0.60 percentage points as a result, which is what the Bank intended.
But the bank now thinks some of the charges are too high. “There significant anecdotal evidence of some surcharging that is not reasonably related to the cost of acceptance,” assistant governor Malcolm Edey told a cards and payments conference in Sydney yesterday.
The Bank is drawing up a new set of rules that will allow card companies to limit what merchant charges to the costs actually incurred by the merchants.
In the gun will be the 10 per cent charge imposed by Cabcharge... and similar companies for using credit cards to pay taxi fares and the $7.70 charge imposed by Qantas. Reserve Bank data shows the cost to the merchants is typically 0.81 per cent.
“We should not view this change as a panacea that will do away with every consumer complaint,” Dr Edey said. “What it will do is empower the schemes to take action where surcharging is clearly excessive.”
The bank is also concerned about weaknesses in the system of internet transfers between bank accounts. Transfers can take up to a day rather than minutes and a lot of special numbers are needed to make them work.
“I can pay someone with a cheque when all I know about them is their name,” Dr Edey lamented. “But if I want to make an electronic payment, I typically need to know a 6-digit BSB number and a 9-digit account number. People are finding partial workarounds that make use of mobile phone numbers or email addresses, but we are yet to have a truly seamless system.”
Reserve Bank board minutes released yesterday show the Bank unconcerned about the private bank's independent rate hikes in February. “The increases were relatively small, largely confined to housing loan interest rates, and did not materially change the current stance of monetary policy,” the minutes said.
In today's Sydney Morning Herald and Age
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