Large merchants still applying high card surcharges

Larger merchants are more likely to apply payment card surcharges and they tend to apply higher charges than small merchants, new research has found.

East & Partners found that 72 per cent of large merchants (those with annual turnover of more than A$725 million) apply a surcharge to their card transactions. Forty per cent of them are applying surcharges of between 1.5 per cent and two per cent.

The majority of those merchants (99.3 per cent) pay merchant service fees of 1.5 per cent or less.

Only 13.3 per cent of merchants with turnover of $5 million of less are charging between 1.5 per cent and two per cent.

East & Partners said that merchant service fees have been heading down.

"The average merchant service fee on all credit cards for merchants in Australia, regardless of their size, was 1.62 per cent in 2010. That figure had dropped to 0.95 per cent at the end of December last year," East said.

Average surcharge levels have also gone down over that period but large merchants stand out for maintaining relatively high charges.