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Visa first to ban surcharges

Visa first to ban surcharges

(19 March 2013 – Australia) Following a Reserve Bank of Australia (RBA) review, new rules to give credit cards companies the power to force retailers to limit what they charge for the use of credit and charge cards come into force on Monday. Visa has become the first company to ban Australian retailers from slapping on the fees, restricting surcharges to as little as 1 percent.

Among the biggest culprits accused of using surcharges as a revenue source are taxi companies, who place a 10 percent surcharge on customers who pay with their credit card.

Airlines and some retailers have also been accused by consumer group Choice of over-the-top fees.

However independent eftpos provider Tyro Payments said the major banks were also to blame, imposing unnecessary fees on struggling small retailers, who then pass the costs onto customers.

Tyro Payments said more than 36 percent of Australian businesses, or 100,000 companies, impose some type of surcharge on a customer's bill, leaving 64 percent or 200,000 - the majority - doing the right thing.

American Express spokesman Fritz Quinn said the firm had updated its terms and conditions to take in the new RBA regulations.

'We have updated our merchants’ terms and conditions to say that any merchants who want to surcharge, that the surcharge should be reasonably related to the cost of accepting American Express,' Quinn said, adding that the majority of Australian businesses did not use surcharges.

'Surcharging is such an anti-consumer practice that people tend to vote with their feet. So if they feel like they are being taken advantage of, they're going to go someplace where they don't have to pay that surcharge.'
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