MasterCard has welcomed the Reserve Bank of Australia’s (RBA) announcement to review of the practice of card surcharging.

RBA’s Payments Systems Board said they were “concerned that in recent years surcharging practices, including surcharging at well in excess of card acceptance costs, may have reduced the effectiveness of previous surcharging reforms”.

David Masters, MasterCard’s vice president of strategy and corporate affairs, said the review could mean consumers would be better protected for excessive surcharging by merchants. 

“It’s a very simple equation – any surcharge raises the price consumers pay, but excessive and blended surcharges are particularly insidious,” he said.

“Blended surcharging sees MasterCard transactions surcharged at the same rate as transactions on competitors’ cards despite the fact these competitors cost merchants on average more than twice as much to accept.”

The RBA tracks the average cost of accepting different types of cards called the Merchant Service Fee (MSF). Their latest release for the March 2011 quarter shows the average MSF for a MasterCard transaction was 0.86 per cent while for American Express it was 1.89 per cent.

“This increasing trend toward excessive and blended surcharges is of huge concern to us and to consumers, given the true cost of each scheme’s acceptance is being masked. Cardholders could be forgiven for believing that all card transactions cost merchants the same, despite the difference of over 1 per cent,” Masters said.