Hefty credit card surcharges could be on the way out after Visa became the first company to ban Australian retailers from slapping on the fees.
New rules come into force on Monday, which Visa says it will use to restrict surcharges to as little as one per cent.
Among the biggest culprits accused of using surcharges as a revenue source are taxi companies, who place a 10 per cent surcharge on customers who pay with their credit card.
Airlines and large retailers with market power have also been accused by consumer group Choice of over-the-top fees.
However independent eftpos provider Tyro Payments says the major banks were also to blame, imposing unnecessary fees on struggling small retailers, who then pass the costs onto customers.
"The truth is many small businesses are being forced to fund the lucrative loyalty programs of the major banks, by absorbing these costs," Tyro spokesman Mr Jost Stollmann said in a statement.
If MasterCard, AMEX and Diners Club follow Visa's suit it would save Australian consumers an estimated $350 million a year based on spending on card transactions last year, Mr Stollmann said.
The new rules follow a Reserve Bank of Australia review and give credit card companies the power to force retailers to limit what they charge consumers to use credit and charge cards.
Tyro Payments said more than 36 per cent of Australian businesses, or 100,000 companies, impose some type of surcharge on a customer's bill, leaving 64 per cent or 200,000 - the majority - doing the right thing.
AMEX and Diners Club card transactions attract surcharges of 3-4 per cent and Visa and Mastercard about 2 per cent, according to the RBA, compared to the banks' service fees of only 0.85 per cent.
Businesses who refuse to comply with the lower charges face warnings, fines and possible termination under the legislation.
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