PaymentsJournal
SUBSCRIBE
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
No Result
View All Result

Aussies Rein in Credit Card Surcharges

Mercator Advisory Group by Mercator Advisory Group
March 18, 2013
in Analysts Coverage
0
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

Based on its review of merchant credit card surcharge practices, the Australian Reserve Board has signaled its intention to rein in the practice by requiring surcharges be aligned with merchant costs.

The board frequently cited in its decision cab drivers who add a 10 percent-surcharge to fares paid with credit cards. An article from the Australian press goes on to report approximately 36% of merchants in Australia currently add a surcharge to credit card purchases. With the new guidelines going into effect this week, Visa has clearly stated it will limit such charges to around 1% of the transaction amount. American Express also stated it intends to make certain any such charges are aligned with the cost of acceptance. MasterCard has yet to comment on the decision.

Credit card surcharges have only recently been allowed here in the United States, based on the recent interchange-fee lawsuit settlement preliminarily approved by the New York courts in 2012. At the time, merchants were quick to proclaim their aversion to adding additional fees to card payments. These same merchants, however, have the ability to negotiate more favorable interchange fee rates in lieu of surcharges, which might negatively impact issuer interchange fee revenue, but will protect consumers from facing higher fees and potentially selecting a lower cost of form of payment.

From The Age:

If MasterCard, AMEX and Diners Club follow Visa’s suit it would save Australian consumers an estimated $350 million a year based on spending on card transactions last year, Mr Stollmann said.

If the Australian payments market is any example, then we would expect to see surcharges here in the T&E industry, although unlike the original AU regulations, the New York court settlement established a 4% ceiling on an surcharges. Regardless of any surcharge-fee ceiling, surcharges tend to have a negative impact overall on the electronic payments market and in our opinion, don’t present a sustainable solution to the thorny problem of economic balance in the payment transaction cycle.

Click here to read more from The Age.

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

    Analyst Coverage, Payments Data, and News Delivered Daily

    Sign up for the PaymentsJournal Newsletter to get exclusive insight and data from Mercator Advisory Group analysts and industry professionals.

    Must Reads

    Why Businesses Need to Adopt Real-Time Payments as a Competitive Differentiator

    Why Businesses Need to Adopt Real-Time Payments as a Competitive Differentiator

    January 27, 2023
    faster payments

    Faster Payments Are Set to Revolutionize Modern Digital Payments

    January 26, 2023
    How AI can Help Manage Payments Risk in 2023

    How AI can Help Manage Payments Risk in 2023

    January 25, 2023
    cross-border payments

    How to Implement Effective and Innovative Cross-Border Payment Strategies

    January 24, 2023
    credit card experiences, digital payments, b2b payments

    Will Consumer-to-Business Payment Trends Drive B2B Global Growth in 2023?

    January 23, 2023
    Faster Payments Faster Identity Verification, connected car, payments

    2023 Predictions: Authentication, Digital Identity, and In-Car Payments

    January 20, 2023
    bank data

    Interconnectivity, Data Sharing, and Security Are Vital for Banks to Thrive

    January 19, 2023
    B2B Payments, cryptocurrency

    Crypto as a Practical Solution to B2B Payments

    January 18, 2023

    • Advertise With Us
    • About Us
    • Terms of Use
    • Privacy Policy
    • Subscribe
    ADVERTISEMENT
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    • Industry Opinions
    • News
    • Resources

    © 2022 PaymentsJournal.com

    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Industry Opinions
    • Faster Payments
    • News
    • Jobs
    • Events
    No Result
    View All Result

      Register to download the Brighterion eBook - The power of today’s market-ready AI to reduce transaction fraud