More number of merchants in Australia are applying a surcharge on credit card payments by customers, according to a study by East & Partners.
The bi-annual Merchants Payments report, which includes data gathered from interviewing 2247 merchants in December 2013, revealed that the average surcharge being applied was at 2.1%, down from 2.55% in 2010. The average surcharge rate has remained static since June 2013.
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Businesses with turnover of $725m or more are more likely to be applying a surcharge compared with smaller businesses. About 65%of institutional businesses currently apply a surcharge with 26.8% willing to do so.
On the other hand, 32.8% of micro businesses apply a surcharge, while another 29% intend to follow the trend.
East & Partners Markets Analysis head, Lachlan Colquhoun, said that while the long term trend an surcharging incidence was clear, it remained to be seen just how low the surcharging rate would go.
"The research shows strong momentum] for more businesses to surcharge, and soon more than nine out of ten large businesses are likely to be doing so," Colquhoun added.
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By GlobalDataGoing forward, one of the key questions is whether the average surcharge rate can tall through the 2% level.
Colquhoun said, "The RBA reforms seem to be having an impact in terms of making businesses think twice before increasing surcharge levels, but we are not seeing much evidence that they are inclined to — on average — take them much lower.
"We are in the field with the research again in June, and those results will give us some answers to this key question."
