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Payments Regulation in Asia
steady decline in the cost of acceptance for certain cards. While many factors influence this decline, surcharging allows merchants to apply persistent and consistent pressure on the card networks to reduce costs of acceptance. In the 15-year period following implementation of interchange caps and surcharging laws, the cost of accepting American Express cards fell from above 2.5% to below 1.5%. This appears to be the effect of indirect downward pricing pressure as a result of the interchange caps as well as the prevalence of surcharging on American Express credit cards. Based on the results of an Australia Competition & Consumer Commission survey, almost three out of four consumers would continue with the transaction if they “encountered a ‘high’ transaction fee and no fee free alternatives.” 5 However, nearly one in four would cancel the purchase, but this can vary by country and channel. For example, price sensitivity may be more prevalent in certain countries and industries. KEY TAKEAWAYS • Limited Implementation by Regulators: Only Australia, one country of the four in scope, has protected surcharging rights for merchants. In all other markets, global network prohibitions on surcharging apply. Despite those restrictions, some countries, such as Singapore, have seen surcharging occur in certain sectors. • Surcharging May Apply Downward Pressure on Uncapped Card Types: As observed in Australia, American Express and Diners Club cards were exempt from the 2003 interchange caps, and yet have seen their total merchant fees steadily fall in the period 2003-2023. American Express rates have fallen from 2.51% in 2003 to 1.32% in 2023. While many factors influence this decline and controlling for myriad factors is empirically difficult, it’s possible that surcharging has contributed to this decline.
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https://studylib.net/doc/9398470/credit-card-surcharges-and-non-transparent-transaction-fee
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