High fees to meet severe repulse

[img_assist|nid=7928|title=|desc=|link=none|align=left|width=100|height=67]Overfees in Australia are no longer to be tolerated. Financial firms are not to gouge customers with higher merchant fees, otherwise the big stick of more regulation will be enforced, the Reserve Bank of Australia (RBA) has warned.
Within the past several years credit card fees have increased 170%.

Now in case the industry left to its own devices raises interchange fees, the central bank will not hesitate to increase regulation, as it is stated by Philip Lowe, RBA assistant governor of financial systems.

When a customer uses a credit card, banks charge each other an interchange fee. It means that the shop owner’s bank makes a payment to the shopper’s bank at an agreed rate.

According to Lowe RBA board is ready to reduce interchange fee payments regulation if the financial industries lower fees which should flow to customers.

"The board would, however, consider re-regulation if, after having stepped back, interchange fees were to subsequently rise materially," said Lowe.

"It does not see a case for higher average interchange fees in the credit card system that currently exists."

A stronger environment for consumers was created due to the improving price signals to cardholders, increasing transparency, the better access arrangements and removing the restrictions on merchants that limited competition.
"The board sees absolutely no case for winding back the reforms in any of these areas," he said.

"Indeed, it has suggested additional step that would give merchants even more choice, that would further improve transparency, and that would reduce the cost of access."