THE "no surcharge" rule for credit and debit cards remains, the central bank confirmed.
While the Reserve Bank of Fiji made the decision under the Banking Act 1995 and the Payments and Settlements Systems Oversight Regulations 2004, it said the rule will be included in a Payment System law that is being drafted.
"This regulatory stance extends to all merchants and all cards used in Fiji and will be effective from 01 November 2012 allowing a necessary transition period for banks to roll out awareness and merchants to review existing practices and procedures," the bank's statement said.
The decision has come following a spate of complaints. RBF investigations revealed that the application of the rule was uncertain and inconsistent.
The RBF's decision is based on submissions from stakeholders and members of the public.
RBF Governor Barry Whiteside said the rule was already in place as stipulated by major credit card providers in agreements with banks and contained in agreements between banks and merchants.
"From a payment system perspective, it is imperative that efficiency be promoted and surcharging practices run counter to this," Mr Whiteside said.
"All payment modes come with costs, for cash it is handling, storage, security transportation and associated costs. For credit and debit cards it is the cost of the electronic infrastructure and payment system networks that facilitate settlement of the transaction.
"To allow merchants to surcharge on card usage effectively means allowing them to accept the benefits afforded by of efficiency and safety of settlement without the inherent cost and this simply cannot be allowed."
The RBF said some merchants would need to review their agreements in terms of acquiring credit cards however the decision needs to be driven by the cost and benefit of the acquiring capability and not the comfort of passing on costs to consumers.
"Cardholders in Fiji are advised that merchants who attempt to surcharge them for paying for goods or services using their debit or credit cards are violating this regulatory stance and must report this to the bank concerned or the Reserve Bank. All customers are advised to only pay the advertised price for an item or service offered by a merchant."
All banks have been urged to step up their awareness programs in educating their merchants of the benefits and also closely monitor their merchants' compliance with the "No Surcharge Rule". The Reserve Bank will also review the "Merchant Service Fee" charged by the banks to the merchants with a view to assuring transparency and equity in pricing across merchants.