The Reserve Bank has narrowed the range of costs that can be included in the "cost of acceptance" when merchants are applying card payment surcharges, in sweeping changes to its surcharge standard announced yesterday.It has banned fixed-amount surcharges and blended surcharges.The RBA's new standard, which takes effect in September, will be policed by the Australian Competition and Consumer Commission, which has been given authority to stop excessive surcharging.The new standard defines the "permitted surcharge" on a card transaction in terms of the merchant's average cost of acceptance for each scheme.The average cost of acceptance is defined in percentage terms so that merchants will not be able to charge high fixed-amount surcharges on low value transactions.The current standard seeks to identify all reasonable costs of card acceptance, including some internal costs. The RBA conceded that "experience with this has indicated that there have been problems in enforcement of limits on excessive surcharges."Under the new standard the definition of 'acceptance costs' is much narrower. It is the merchant service fee for the particular card plus any other card related fees paid to the merchant's acquirer or payments provider.Other card related fees would include payment terminal rental and maintenance and any scheme fees passed on the by acquirer.In addition, the RBA has allowed five specific items to be added to acceptance costs: fraud-related chargeback fees paid to the merchant's acquirer; gateway services; fraud prevention services; any cost of insurance for forward delivery risk; and the cost of terminal rental from parties other than the merchant's acquirer or payment facilitator."Targeting simplicity is likely to lead to an approach to surcharging that is more efficient and enforceable in practice," the RBA said.To make the ACCC's enforcement role effective, any costs included in the permitted surcharge must be easily observable and verifiable by way of contracts, statements or invoices. Acquirers and payment facilitators will be required to provide merchants with easy-to-understand information on the cost of acceptance for each scheme.The new standard will preclude the use of blended surcharging, which occurs when a merchant applies a single surcharge across two payment systems with different acceptance costs and sets the surcharge at the average acceptance cost of the two.Merchants will be allowed to levy the same surcharge on two or more systems in the interests of simplicity but they will not be able to do so at a rate that is higher than the lowest acceptance cost of those systems.Taxi payments, which are regulated at state level, have been left outside the framework.