16may ban on sky high surcharges hero1
17 May 2016

Ban on sky-high surcharges

The Australian law is expected to be in force this year.

Steep fees for paying by credit card are for the chop in Australia following a ban on excessive surcharges. The law change means Australian consumers will have better protection from high credit card fees than consumers on this side of the Tasman.

The Australian provisions are expected to be fully in force this year. Companies that don’t play by the rules risk being slapped with an infringement notice and fine of up to $120,000. Surcharges will be deemed excessive where they exceed the direct costs of accepting card payments.

Until 2009, a “no surcharge rule” agreed between credit card companies and the banks prevented retailers here from passing on fees for card transactions. But after the Commerce Commission brought proceedings alleging anti-competitive arrangements, the rule was dropped.

Since Air New Zealand introduced its credit card surcharge in 2010, the fee has doubled from $2 to $4 per passenger for each one-way domestic trip. Jetstar has increased its charges from $2 to $5 over the same period. Both airlines levy higher card-payment fees for international travel.

We think Kiwi consumers deserve the same protection as their Aussie cousins from high surcharges. If you’ve been stung by a stiff fee for paying by credit or debit card, let us know — email aneleise@consumer.org.nz.

Member comments

Get access to comment