Payment card schemes may be allowed to introduce a cap on the surcharges that merchants can apply to payments made with a credit card or debit card under a
proposal outlined by the Payments System Board on Friday.
The PSB proposed that the cap allow merchants to explicitly charge reasonable costs, which would include the merchant fee charged by their bank, as well as other costs relating to the handling of a card payment.
It is not clear what mechanisms banks and card schemes might adopt to enforce such caps, and these entities were not particularly vigilant in policing their "no surcharging" rules in the 1990s.
The PSB forced the card schemes to scrap these rules in the early 2000s, a step that encouraged many more merchants to apply a surcharge to card payments.
Data on the incidence of surcharging is scrappy. A study by Roy Morgan Research for the PSB puts it at five per cent. And a study by East & Partners cited, by the PSB in the middle of the year, found that around 10 per cent of surcharging merchants apply a surcharge of five per cent or more. The average merchant service fee is around one-fifth of this level.
The PSB said that it had collected further data on surcharging over recent months and concluded that "it is not uncommon to find merchants of many different types applying ad valorem (according to value) surcharges at levels that are significantly greater than would be implied by the distribution of merchant service fees."