The Reserve Bank of Australia is planning to revise the standard for card payments that would limit surcharging to an amount linked to the cost of acceptance, RBA Assistant Governor Malcolm Edey said Tuesday.
In a speech in Sydney, he said that there is significant anecdotal evidence of some surcharging that is not reasonably related to the cost of acceptance. There are practices of excessive surcharging where a merchant might be recovering costs on an average basis without distinguishing between high and low-cost card payments.
Another would be where a surcharge simply exceeds any reasonable estimate of the cost of acceptance, Edey said. Though these practices are not widespread, they are of concern from a payments efficiency point of view because they can distort consumer choices about the payment methods that they use, he added.
Therefore, the central bank reopened consideration of the surcharging standard last year and a draft revision to the standard was released in December. It is now in the final stage of consultation, he said.
"If adopted, the revised standard will allow schemes to limit surcharging to a reasonable cost of acceptance, but schemes will not be able to prohibit surcharging altogether or prevent merchants from recovering their costs." For this purpose, the cost of acceptance will be defined as including, but not being necessarily limited to, the merchant service fee, the policymaker noted.
He said this change should not be viewed as a panacea that will do away with every consumer complaint. "It is also important to make clear that the Reserve Bank is not setting itself up as a regulator of merchant behavior," Edey clarified.
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