Australian Credit Card Overhaul Attacked
Matt Wade reports for tomorrow morning's Sydney Morning Herald on a new analysis performed by Network Economics and sponsored by Visa that shows that the changes introduced in credit card interchange fees in 2003 by the Reserve Bank of Australia "had either a negligible or, more likely, a slightly negative effect on consumer welfare."
Bank fee income from issuing credit cards surged by about 80 per cent between 2002 and 2004 due to big increases in annual fees, cash advance fees and fees for late payments or overdrawn limits.Visa's made the full report (PDF) available online."In total, these effects are likely to outweigh the potential reduction in consumer prices that would occur even if merchants were to fully pass through the lower [merchant service fees] into lower prices," it says.
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