There are talks at the moment about how new legislation passed by the Federal Senate could help prevent Australian shoppers from over paying in credit card charges to the tune of up to $800 million per year. However, there are sceptics who think that the change in law could in fact end up costing Australians millions instead.
The new legislation aims to punish corporations who engage in excessive surcharging at the cash register. If caught, a corporation will have to pay up to $108,000 for each offense. The ACCC will be responsible for policing the new law when it comes into affect later in this year. So, how will it affect you and your wallet?
To give you an idea of what is actually going on at the moment, the average merchant service fees that MasterCard and VISA apply sits at around 0.81%. The following figures are what the worst offenders (Australian airline companies generally) charge you for the privilege of booking with them:
- Jetstar: $25 per person or $100 for international flight from Brisbane to Denpasar. Maximum of 2312% on a $87 ticket
- Qantas: $7.70 per person per booking or a total of $35 on a domestic flight from Brisbane to Bundaberg. Maximum of 339% for a $197 ticket
- Virgin Australia: $7.70 per person per booking or $30.80 for domestic flight from Mackay to Brisbane return. Maximum of 412% for a $185.70 ticket
- TigerAir: $8.50 per person per booking or $68 total for domestic flight Sydney to Brisbane return. Maximum of 1479% for a $132.90 ticket
This legislation isn’t something that has just came along on it's own either. We have to thank all those consumer advocates who spent years of their time lobbying against hefty fees, which at times cost consumers up to 10 times the actual cost of processing credit cards. Choice group have singled out Australia’s four major domestic airlines as some of the worst offenders, with JetStar taking the number one position. Jetstar has been known to charge up to 10% or $9.70 for processing a credit card on a $97 air fare, when the actual cost to the company is only $0.66 cents.
Probably one of the greatest victories for consumer rights in recent years, this deal will hopefully secure better value for money for consumers across the continent and prevent merchants from abusing their customers.
There is one man in particular who is responsible for bringing this to the nations attention through a three-year long campaign and we have Queensland businessman Klaus Bartosch to thank. Via his Change.org petition he managed to secure 5,000 submissions to bring to the Murray financial system inquiry. Now victorious, Klaus believes that although millions may be saved every year, corporations may now find new ways to charge customers surcharges or at least recover some of the money they are in the delusion of thinking we owe to them.
MasterCard released figures stating that during 2014 Australians collectively paid $1.6 billion in credit card surcharges, which is what MC and VISA charge. It’s difficult to determine the precise amount Australians actually pay once corporations whack on their surcharge tariffs, because no study has been completed on this subject in enough detail. The new legislation now means, however, that the people have the power to bring these corporations to their knees by taking claims against high surcharges to the ACCC.
VISA have also set up an email address where you can report businesses that are charging excessively high surcharges for processing its cards. To do so, you can email firstname.lastname@example.org and report names and locations of retailers charging high fees. So keep your eye's open and let us know in the comments section below if you've ever been heavily stung like this before...