As a result of a review of the regulatory framework for card payments conducted last year by the Reserve Bank, the Federal Government recently announced draft legislation that will insert a ban on surcharging in excess of merchant costs into the Competition and Consumer Act (2010).
The Reserve Bank recently released a Consultation Paper containing amended draft standards for card payments regulation. The draft standards include changes to the regulation of surcharges on card payments and interchange payments in card systems.
The draft standard suggests the following framework for the surcharging of card payments:
- Card schemes will not be permitted to make rules that prevent merchants from recovering part or all of the costs of accepting card payments.
- However, card acceptance costs will be defined more narrowly than in the Bank’s current guidance note, as the merchant services fee and other fees paid to the merchant’s bank (or other payment service provider).
- Statements provided by banks to merchants will be required to contain easy to understand information on the average cost of acceptance for each payment method, which will constitute the maximum permissable surcharge if the merchant chooses to surcharge.
- These statements will express acceptance costs in percentage terms, except where a merchant’s cost of acceptance for a particular payment method is fixed across all transaction values.
The Reserve Bank is seeking industry views on the proposed changes. We are interested in hearing your views to include in a submission. Click on the button below to provide your feedback by Tuesday, 2 February.