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The Australian Retailers Association (ARA) has welcomed the Reserve Bank of Australia's (RBA) decision to accept recommendations on payments system reform to scrap the need to surcharge.

The RBA Payments Systems Board will see reforms that will reduce merchant fees and regulate high cost payment cards such as American Express, Diners' Club and China Union Pay.

ARA executive director Russell Zimmerman believes that the reforms will be a welcome relief for both retailers and consumers using regulated credit cards.

“The capping of premium card charges at .80 percent and the more regular weighted average benchmark setting at .50 percent will drive lower costs for retailers.

“Retailers do not like passing on surcharges to consumers and where costs are reasonable on payments systems, retailers don’t surcharge.

“Both parties will benefit from lower costs as a result of these changes.”

The new framework for surcharging will take effect on large retailers on September 1 this year and smaller scale retailers on September 1 2017.

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