Particle.news
Get it on Google Play
Download on the App Store
3 ARTICLES
·
17h ago

Australia Bans Card Surcharges as Interchange Cap Forces Market Shift

The reform aims to deliver more than $1 billion in annual consumer savings by removing per-transaction card fees, forcing merchants to absorb costs, raise prices or offer cash discounts, with banks trimming rewards and lifting card fees.

A sneaky tax on card payments is being outlawed from next week, saving Aussies $1.6 billion a year. But experts warn the ban could force small businesses to raise prices for everyone.
There's a good chance some businesses will raise prices once a card surcharge ban takes effect. (Susie Dodds/AAP PHOTOS)
Image

Overview

  • The Reserve Bank of Australia’s surcharge ban takes effect next Thursday, October 1, and forbids retailers from adding per-transaction fees to debit or credit card payments.
  • The RBA says the ban will save consumers more than $1 billion a year while some outlets report projected savings of about $1.6 billion annually.
  • As part of the package the RBA has capped interchange fees at 0.30%, down from 0.80%, and banks have already cut card rewards and raised annual card fees to protect revenue.
  • Small merchants face immediate choices: absorb merchant fees, raise posted prices, or offer discounts for cash or alternative payments, and experts warn it is unclear whether interchange cuts will reach small businesses without renegotiated merchant agreements.
  • Watch for new RBA transparency data and merchant negotiations because these will determine if consumers and small businesses actually benefit, and they may prompt more account-to-account payment options or changes to which card types retailers accept.