Gay McNamara reports on the situation in Australia as merchants beginning January 1 are free to surcharge credit card transactions.
The Reserve Bank estimates the service fees on credit cards cost merchants about $1.5 billion a year, which is passed to consumers through higher prices.
Small retailers are the hardest hit, paying an average 3 per cent to 3.5 per cent and some paying more than 4 per cent. But they were restricted from passing the cost to customers under credit card scheme rules.