Australians are shelling out more than $1.6 billion in credit and debit card surcharges every year, prompting calls for hidden fees to be abolished.

The additional charges cost the average Australian more than $130 annually, according to credit card giant MasterCard.  

As part of its submission to the Financial Systems Inquiry, MasterCard has called for surcharges to be abolished, and the introduction of laws to create an equal playing field for all card providers.

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Presently, separate rules relating to surcharges apply to each major card provider.

MasterCard Australia executive Brent Thomas said current laws allow merchants to charge consumers extra fees without fear of consequences.

“At the moment we see across some industries there are some unreasonably high levels of surcharging,” Mr Thomas told AAP.

“Regulations allow surcharges to be kept to a reasonable level. But there is no government authority out there saying that surcharge is unreasonable, can you reduce or remove it.”

Mr Thomas said if surcharges were unable to be abolished, then a government watchdog should be appointed to regulate the industry.

The FSI is currently reviewing the payments sector, focusing on interchange fees, merchant service fees and customer surcharges.

MasterCard’s call for changes to the system comes after the Victorian government halved card service fees in taxis to five per cent.

Legislators in NSW and Western Australia have signalled their intention to follow suit.

A MasterCard survey of 2,000 Australians revealed airlines were perceived to be the worst offenders, with three in five people believing they’re getting stung by significant surcharges for using their cards.

More than a third of those surveyed have decided not to complete a purchase after seeing a surcharge, while a quarter have decided to look for the same item elsewhere.

The survey found 86 per cent of Australians are now on the lookout for surcharges and hidden fees and factor them into spending decisions.