The Australian retail industry is denying claims that it is applying excessive surcharges to credit cards and said there is no need for the Reserve Bank to take action.
In June, the central bank discovered that merchants with annual turnover of more than $530 million were the most likely to hit consumers with a surcharge for using credit cards, according to TheAge.com. It also found that nearly 30 percent of merchants last year slapped a surcharge on at least one of the cards they accepted.
The Reserve Bank is currently going through approximately 40 submissions made to its review on surcharging.
Gerard Brody, the director of policy and campaigns at the Consumer Action Law Centre, said more action was needed to protect consumers from price gouging by merchants.
"We are concerned that there are some retailers, particularly online, implementing credit card charges far above the cost of the credit card payment mechanism and more does need to be done to stop it," Brody said, according to TheAge.com.
Companies well known for excessive surcharging include airlines, the taxi industry, telecom companies, holiday travel businesses and utility companies, according to TheAge.com.
The Australian Taxi Drivers Association said that larger retailers would ignore any changes to the standards unless a limit to surcharges was made mandatory.
"There is no reason to indicate that further reforms now mooted will make any greater difference…large and dominant merchants will simply continue to do as they please, and smaller merchants will tag along," the association said, according to TheAge.com.
In 2003, the central bank decided to allow merchants to add a surcharge of MasterCard and Visa credit systems in order to stop merchants from adding the cost of accepting card payments to the prices of their products and services. Consumer advocates, however, said that this enabled merchants to use surcharging as another way of making revenue.
The Australian Merchant Payments Forum said there is no need to change the current standards.
""The AMPF does not believe there is sufficient credible evidence to support the view that there is widespread excessive surcharging taking place in the market today,"" the AMPF said, according to TheAge.com.