Airlines and some retailers have also been accused by consumer group Choice of over-the-top fees. However independent eftpos provider Tyro Payments says the major banks were also to blame, imposing unnecessary fees on struggling small retailers, who then pass the costs onto customers. "The truth is many small businesses are being forced to fund the lucrative loyalty programs of the major banks, by absorbing these costs," Tyro spokesman Mr Jost Stollmann said in a statement. If MasterCard, AMEX and Diners Club follow Visa's suit it would save Australian consumers an estimated $350 million a year based on spending on card transactions last year, Mr Stollmann said. 'Overdue'

Consumer advocacy group Choice welcomed the changes, which it had been campaigning for. ''This is something that we've spent years calling for. ... The proof now will be on whether some of the highest surcharges - particularly the airlines and the taxi industry - actually start to reduce their fees as a result of these changes,'' Choice's head of campaigns, Matt Levey, said. ''We are optimistic, but it remains to be seen how soon [others act] and whether some merchants try and get around this by applying surcharges under another name.'' Cards act The new rules follow a Reserve Bank of Australia review and give credit card companies the power to force retailers to limit what they charge consumers to use credit and charge cards.

American Express spokesman Fritz Quinn said the firm had updated its terms and conditions to take in the new RBA regulations. "We have updated our merchants’ terms and conditions to say that any merchants who want to surcharge, that the surcharge should be reasonably related to the cost of accepting American Express," Mr Quinn said, adding that the majority of Australian businesses did not use surcharges. "Surcharging is such an anti-consumer practice that people tend to vote with their feet. So if they feel like they are being taken advantage of, they're going to go some place where they don't have to pay that surcharge." MasterCard said it was not commenting at this time. Review

The new rules follow a Reserve Bank of Australia review and give credit card companies the power to force retailers to limit what they charge consumers to use credit and charge cards. Tyro Payments said more than 36 per cent of Australian businesses, or 100,000 companies, impose some type of surcharge on a customer's bill, leaving 64 per cent or 200,000 - the majority - doing the right thing. AMEX and Diners Club card transactions attract surcharges of 3-4 per cent and Visa and Mastercard about 2 per cent, according to the RBA, compared to the banks' service fees of only 0.85 per cent. Businesses who refuse to comply with the lower charges face warnings, fines and possible termination under the legislation. It is understood Cabcharge's 10 per cent surcharge added $90 million in revenue during the 2012 financial year.

Cabcharge's founder Reg Kermode said a few weeks ago that he did not believe the Reserve Bank could force it to comply with the new rules.

Discount airline Jetstar told Fairfax Media last week it no longer had a credit card surcharge, and only charged a booking and service fee. Jetstar added that it would be looking into the new policies to see if further changes would be needed.

Qantas said last week that claims it was profiting from its surcharges was wrong. Loading "The income we get from surcharges does not exceed our costs and never has done," a Qantas spokesman said. AAP with Glenda Kwek, Rachel Wells

