The Reserve Bank of Australia mulls over capping hefty credit card fees amid claims that consumers are being gouged for excessive charges. The central bank has launched a review of credit card surcharging, highlighting concerns that some establishments are using fees as a means of increasing profits, instead of covering the cost of the transaction

In a discussion paper, the RBA uses data from East & Partners to show almost 30 per cent of merchants impose a surcharge on at least one of the credit cards they accept. The RBA's Payments System Board has suggested placing a cap on credit card surcharges and is seeking industry feedback from merchants, card companies, consumer groups, and other interested parties before reaching a conclusion on whether fee caps are needed.

International financial institution MasterCard has urged the RBA to limit credit card surcharges, to stop retailers from overcharging customers for transaction fees. MasterCard says surcharge gouging has been a widespread practice with hotels, cabs and airlines among the worst offenders.

MasterCard spokesman David Masters confirmed with ABC Radio that the surcharge price is well above what that merchant pays for card acceptance.

"It's got to the point where it is very cleary, and demonstrably, increasing the cost that consumers pay at the point of sale,” he said.

The RBA’s Payments System Board will accept submissions until 20th July.