Credit card surcharges of up to 23 times the average fee undermine consumer confidence and hurt business, a Senate inquiry has been told.

A Senate committee is taking evidence in Canberra on Monday as part of its inquiry into the cost of credit cards.

Consumer advocate Klaus Bartosch, who is campaigning for a national ban on surcharges, told the inquiry the average merchant fee for MasterCard and Visa was 0.81 per cent.

But airlines charge much more than this.

The Qantas markup on a $197 air ticket was 339 per cent above the average, while Jetstar’s markup was 2312 per cent for an $87 ticket.

Virgin Australia’s markup was 412 per cent above the average for a $185 ticket.

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Mr Bartosch said the charges were well above the actual cost of the transaction and often deterred people from making a purchase.

“It undermines consumer confidence, will undermine consumer spending and ultimately business will lose,” he said.

Some US states had banned such surcharges and Australia should follow suit.

Prime Minister Malcolm Turnbull last month announced a limit on merchants imposing surcharges that exceed the cost of accepting a card payment.

Mr Bartosch said such a move would lead to more businesses renaming surcharges as “service fees” or “administrative charges” to get around new regulations.

Businesses should be more transparent and the advertised price for goods and services should not disguise surcharges, he said.