AS a new report reveals a sharp increase in fees for using credit cards, the NSW Government has called on retailers to disclose how they determine their charges.

Retailers should visually display what they are charging customers for using credit cards, Fair Trading Minister Virginia Judge says.

A report by consumer group Choice, commissioned by the State Government, has found the number of merchants charging fees for credit card transactions has risen steeply over the past few years.

Twenty per cent of smaller merchants and 40 per cent of larger businesses now surcharge their customers.

Taxi companies charge up to 10 per cent, and flat-rate surcharges can be even higher in percentage terms.

The highest flat fee the survey found was by Qantas, which charges $25 per person per international booking.

Ms Judge says she will be writing to Federal Parliamentary treasury secretary David Bradbury outlining the report.


"An idea I'd like to explore is actually asking merchants to have visual displays that they are charging surcharges and what that amount would entail," she said in Sydney today.

Many merchants surcharge at unfair levels to bump up their revenue, Choice spokesman Christopher Zinn said.

"It is a gouge, it is a revenue stream - we say that's not right, it's not fair," he said.

While the intention of allowing a surcharge was to encourage competition and lower the cost of using credit cards, it has led to some merchants charging excessive fees of up to 10 per cent.

"The Reserve Bank permits (surcharging) under law and actually we think for quite good reasons, but the issue is that some of the surcharges are patently excessive," Mr Zinn said.

"There are many more merchants who are going to be surcharging, perhaps at levels which aren't fair, which are excessive."

The taxi industry had been "coining tens of millions of dollars" out of surcharges for over a decade, Mr Zinn added.

The Choice report, which involved a survey of 1435 consumers and 140 members, found 68 per cent of respondents did not believe retailers and other businesses should be allowed to surcharge credit card transactions.

"Transparent surcharges at reasonable levels, which are typically one per cent for most cards, are fair enough," Mr Zinn said.

But we are concerned by excessive surcharges that are often not apparent until after you've paid, making it too late to use an alternative fee-free method."

Credit card company Visa welcomed the report, saying it showed some retailers were surcharging to bolster their own profits.

"This is hurting consumers at a time when they are already facing increased cost of living pressures," Visa general manager for Australia and New Zealand Chris Clark said.

"Where surcharging is allowed, we consider it an imperative that the surcharge reflects no more than the merchant's reasonable cost of acceptance for the card used."

Blended surcharging, whereby merchants apply the same average surcharge to both higher and lower cost cards, should be banned, Mr Clark added.

Both Mr Zinn and Ms Judge called on consumers to take action against unfair surcharging by using different methods of payment or taking their business elsewhere.

"We can use competition to actually ensure that the surcharges are at a fair minimum level," Mr Zinn said.

While the issue is one for the federal government, Ms Judge said she would do everything in her power to highlight the issue and promote fair surcharging.

"We want to have a fair and honest marketplace," she said.