Microsoft Australia has finally fixed the international transaction fee issue of Windows Phone 7 users (and other regional markets around the world), with credit card purchases of apps and games from the WP7 marketplace.
The root cause was that Microsoft didn't have payment processing facilities in a number of regional markets around the world to handle credit card transactions locally. In Australia's case, these transactions were previously processed in Microsoft's Asia Pacific hub, Singapore. Instead, now they're processed in Sydney as "MICROSOFT *WIN PHONE NORTH RYDE".
Microsoft has now been so kind and should be applauded given the circumstances of the issue to setup a local transaction facility in Sydney, Australia, so that users will now no longer be hit with the international surcharge fee from the banks.