Pressure On Credit Fees
Illawarra Mercury
Saturday December 2, 2000
Banks came under pressure from the nation's top banker yesterday to cut their credit card fees and make fees more transparent to customers.
Reserve Bank Governor Ian Macfarlane said he wouldn't be ordering banks to set fees at a certain level.
But he told Parliament's economics committee, meeting in Wagga Wagga, the current arrangement under which banks forced all credit card customers to pay the same high but hidden fees could not be sustained.
``What we would be looking for is for them to come to a system which was transparent, people would see what was going on, what other people were being charged," Mr Macfarlane told the committee.
``We would like to see a system where the consumer actually has some influence, where the card holder can use the card, or the ATM, that charges the lowest price."
A joint Reserve Bank and Australian Competition and Consumer Commission (ACCC) study found consumers were paying too much for using credit and debit cards.
It found credit card fees were set by the major banks, with consumers unable to have any ability to shop around, or even know up front how much they were being charged.
The fees are charged to merchants, but are then built into prices passed on to consumers, meaning even those who don't use the cards bear the cost.
Mr Macfarlane said there appeared to be no relationship between the fees charged and the cost of the cards to banks.
``One of the problems here is these prices were set a long time ago and the technology which underlies that has improved so enormously that the unit costs must have been coming down, and yet prices stayed where they were," he said.
© 2000 Illawarra Mercury
