Australians are not going to be "Happy as Larry" when it comes to using their credit cards to make purchases next year. Australia's central bank ruled this week that retailers may pass on credit card merchant fees to their customers by charging a convenience fee for each transaction. Most credit card networks forbid merchants from penalizing credit card users. The new ruling, which affects 10 million cardholders, goes into effect in January. The The Reserve Bank of Australia also decided this week to cut merchant credit card fees by 40%. The twin decision is a boon for Australian merchants but a major hit for the country's major bank card issuers. It is expected that future earnings of National Australia, ANZ Banking Group, Commonwealth Bank, and Westpac could be reduced by up to 2% due to the lower merchant fees. The reduction in merchant fees applies to VISA and MasterCards but not to American Express or Diner's Club. However, American Express and Diners Club have each indicated to the Reserve Bank that they will remove their restrictions that prohibit merchants from charging their customers extra fees. The ruling is unique in the world but could spread to other countries. VISA and MasterCard have indicated they will continue to oppose the ruling.
