Antitrust Alert: Australian Competition Authority To Enforce Credit And Debit Card Fee Limits

In recent years, it has become common for companies that accept credit or debit cards in Australia to charge transaction fees or surcharges for the use of the cards. For example, restaurants, doctors, shops, and other merchants commonly charge between 1% and 5% over the price of the goods or services for a customer who uses a credit or debit card. Event ticketing companies and airlines often charge several dollars per sale in transaction fees. In some cases these fees or surcharges are higher than what a bank charges to these merchants for use of the system.

The Australian Government now has passed an amendment to the Competition and Consumer Act that limits the amount that can be charged by a merchant that accepts credit or debit cards issued by networks designated by the Reserve Bank of Australia (RBA). The regulations currently limit surcharges to the average cost of accepting the card, calculated as the sum of the merchant service fee, terminal rental charge,