CHICAGO — One result of Australia's 2002 credit card interchange rate reform has been a growing trend among merchants to surcharge consumers who use cards, according to an Australian bank regulator.
John Simon, chief manager for the payments policy department of the Reserve Bank of Australia, described for attendees of the Federal Reserve Bank of Chicago's 2009 Payments Conference a situation where Australian merchants have increased their use of surcharges for consumers who choose a card over another payment method.
Allowing retailers to surcharge card transactions had been a key part of Australia's 2002 reform.
Recommended For You
"In larger merchants, we have seen the numbers surcharging particularly rise because of the utilities," Simon said. Utilities have moved to using surcharges on card transactions in part to help drive consumers to using other electronic means of payment, such as electronic check transactions, he said, though he acknowledged as well that very small merchants were driving consumers to using cash.
Asked later whether the surcharges were asking consumers to pay for a payment method that benefited primarily financial institutions and merchants, Simon countered that consumers have always paid for different payment systems, and suggested that the surcharges merely brought the real costs of the different payment systems out into the open.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
