Flights, accommodation, taxi fares and gas and electricity bills could soon cost less thanks to a move by the federal government to curb credit card surcharges.

Small business minister Bruce Billson, who also has responsibility for consumer affairs, is planning to take formal action by the middle of next year against “recalcitrant merchants” who charge credit card fees “way outside any sense of reasonableness”.

“I’m batting for the consumers,” Mr Billson assured The New Daily.

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Small business minister Bruce Billson says he is batting for consumers. Photo: AAP

Credit card fees have been put in the spotlight by the Financial System Inquiry (FSI), also known as the Murray Inquiry, which called for “more prescriptive limits on surcharging”.

Despite a ruling from the Reserve Bank in March last year that merchants cannot charge more than it actually costs them to accept credit card payments, Australians paid at least $400 million in excess surcharges in the 12 months after the ruling came into effect, MasterCard estimated.

The RBA’s attempt to fix the problem failed because it was easy for the worst offenders – taxis companies, airlines, major hotels and utility companies – to get around the guidelines without suffering any penalty.

“Yeah, there is a current lack of an enforcement mechanism,” Mr Billson acknowledged.

The exact solution is murky

The minister wants to give corporate regulator ASIC the power to crack down on excessive surcharges, but the Murray Inquiry dismissed this proposal as potentially too complicated and costly without putting forward an alternative solution.

Mr Billson is still considering beefing up either ASIC or consumer watchdog the ACCC, neither of which currently have the power to pursue merchants who over-surcharge, while also looking at other options.

“I’m keen to learn more from the FSI panel about why they were concerned about that approach, which seems to be working effectively in the mortgage transfer space, and any alternative course of action that might be open,” he said.

“Where there’s a need for more work is just precisely what the best remedy is.”

CHOICE campaign manager Erin Turner told The New Daily that enforcement “really is the missing piece of the puzzle here”.

“You need to have a cop on the beat making sure people play by the rules,” she said.

While credit card companies and banks both take a cut of these fees, merchants are to blame for charging above cost, Ms Turner said.

“Merchants are passing on a fee much larger than what it costs them to receive a payment. They’re the ones who are really at fault here and they’re the people that we’d like to crack down on,” she said.

Are you being overcharged?

Anyone paying more than one per cent is probably being overcharged, according to past research by CHOICE.

The average fee a merchant pays when you hand over a Visa card, for example, is 0.8 per cent, according to the company.

Visa told The New Daily that it makes no money from surcharging, and currently supports a total ban.

“When we see a merchant charging three per cent, we see that as a barrier to card payments,” said the spokesperson.

“Our view has always been that there needs to be public enforcement if we’re going to see any real reduction.”

What can you do now?

Until formal action is taken, the minister wants you to complain immediately, often and loudly about these fees to the dodgy merchants.

“The best thing consumers can do is hold the merchants to account and make it known that this is not acceptable,” Mr Billson said.