For a long time, and across different businesses and industries such as ticketing companies, airlines, taxis, and restaurants, many customers have been victims of excessive surcharges whenever they pay with their credit cards.

In a recent analysis of credit card surcharges by airline companies, it was found that often, the booking fee was always well above the actual cost of making payments with credit cards. For example, Qantas had a $7 credit card surcharge, which was 348% more than it should be. Another example is Jetstar’s $8.50 credit card surcharge that was a whopping 1187% over the actual cost (see table below for more examples).

ACCC empowered to act

On the 22nd of February 2016, the senate passed a bill called The Competition and Consumer Amendment (Payment Surcharges) Bill 2015. The bill targets companies for their excessive credit card surcharges on payments processed with credit cards. In the past, some companies had been banned for excessive surcharges by the Reserve Bank of Australia (RBA), but this did not serve as a deterrent, as these companies simply continued on their merry way. Tom Godfrey, a spokesperson for CHOICE said of the new bill, “We are delighted that the ACCC has finally been given the power to investigate if a surcharge is fair and issue infringement notices of up to $108,000 for companies that don't play by the rules."

It is hoped that the new bill will propel defaulting companies into dropping their surcharges before the law catches up with them. Hopefully, the Reserve Bank’s gets its regulations right.

Sky high surcharges in the Airline industry

An investigation by CHOICE revealed that airlines are the main culprits where credit card surcharges are concerned. They regularly bump up the cost of processing payments by up to 1000% in some cases. Below are some examples:

*Flights chosen were Sydney to Melbourne flights on Monday 29 February 2016. Cheapest flight before 9.00am

**Percentage increase calculated from RBA 2015 data on the average merchant service fee of 0.78%.