Card payment sucharges banned in Australia from 2026

[transpactraveller]

Just adds to reason 1043213 why I hate living in Australia. We are counting down the days until we can live elsewhere

Good luck finding somewhere better. Let us know when you do, would love to know where this secret utopia is.

 

[Happy Dude]

swing over to the retirement thread @lovestotravel. Thoughts on extended OS living very welcome there.

 

[HMcM]

You were already paying that higher price, but they tricked you into thinking it cost less than what you actually paid. They told you it was $99 but charged $101 to your card. Now they'll tell you upfront it's $101, and that's what you'll pay.

Except before you had by law an alternative, now you don't. If it said $99 before and you handed over $99 in cash then that was all you paid. Now the sign says $101 and handing over $99 in cash doesn't cut it anymore.

 

[Mr_Orange]

Once again, many folks seem to be missing the point. Businesses, when they write their business model, need to account for all of their costs and build those, along with profit, into their pricing. Unsurprisingly, there is a cost associated with accepting payment, whether that is cash, cheque (listed for completeness only and not current relevance) or card (debit/credit/EFTPOS). Not baking this into the business model is a failure to write a competent business model. There should never have been a need to surcharge.

The same thing applies to penalty rates, where they apply. I will not use businesses that have weekend or public holiday surcharges. They just aren't necessary. The number of weekends and public holidays are known in advance and therefore so are the additional staffing costs. Build them into the business model and keep prices consistent. If you can't compete, don't open on weekends or public holidays.

 

[HMcM]

Once again, many folks seem to be missing the point. Businesses, when they write their business model, need to account for all of their costs and build those, along with profit, into their pricing. Unsurprisingly, there is a cost associated with accepting payment, whether that is cash, cheque (listed for completeness only and not current relevance) or card (debit/credit/EFTPOS). Not baking this into the business model is a failure to write a competent business model. There should never have been a need to surcharge.

Personally I don't care whether or not surcharges exist in a market, I just prefer companies to be able to make the choice themselves as opposed to the government sticking its thumb on the scale. If a company wants to offer a more expensive payment method and make the user pay to use it while still offering the product for the advertised price for a payment method that is cheaper that's fine by me. The credit card company gets to choose its fees, the business gets to choose the surcharge (though I agree with rules not placing undue surcharge) and then customer gets to choose which payment method he wants to go with.

I think about it in the same way as online orders being delivered. Some places offer free delivery, AKA they price the cost of delivery in their business model. Some places offer free delivery for certain products or order amounts. Some places make you pay full delivery for any order you make. That's the company's decision to make and the customer's choice which business they frequent. What would stop someone using your logic and saying that no company online should charge for delivery and it should have to be priced into the purchase amount?

The same thing applies to penalty rates, where they apply. I will not use businesses that have weekend or public holiday surcharges. They just aren't necessary. The number of weekends and public holidays are known in advance and therefore so are the additional staffing costs. Build them into the business model and keep prices consistent. If you can't compete, don't open on weekends or public holidays.

So you want to make everybody pay more 99% of the time to subsidise people who go out on a public holiday? Once again, the only reason that these surcharges exist is the government putting their thumb on the scale. I never used to pay a Sunday or a weekend surcharge, but when employers got forced to pay massive markups for their staffing costs on a Sunday they very quickly became ubiquitous. We're gone of the days where most Aussies hold Sunday to be sacred, but we force companies to pay as if it is. Personally I'd prefer to work a Sunday and get a weekday off every week.

 

[transpactraveller]

Except before you had by law an alternative, now you don't. If it said $99 before and you handed over $99 in cash then that was all you paid. Now the sign says $101 and handing over $99 in cash doesn't cut it anymore.

This will still be possible, cash discounts aren't being outlawed. What is being banned is the 'drip pricing' and 'hidden fees' tactics of surcharging. They can charge you less than the sign, not more.

From October, the business can put up a sign saying $101 but still choose to accept $99 in cash. What they're being banned from doing is putting $99 on the sign then charging $101 if you pay by card.

 

[HMcM]

This will still be possible, cash discounts aren't being outlawed.

From October, the business can put up a sign saying $101 but still choose to accept $99 for it in cash.

What they can't do anymore is put up a sign for $99 and then charge you $101 if you pay by card.

If you think that the same number of businesses that currently have card surcharges are going to suddenly have cash / EFTPOS discounts then you're having a laugh.

This policy will make most people pay more.

 

[transpactraveller]

If you think that the same number of businesses that currently have card surcharges are going to suddenly have cash / EFTPOS discounts then you're having a laugh.

This policy will make most people pay more.

Most people pay by card not cash. So most people will pay the same or less.

To cover lost surcharge income, prices would only need to rise by the surcharge amount, meaning the total price paid remains the same. The only difference is it's now shown to you as the total price before you pay, instead of being sneakily added on after you tap your card.

Unfortunately some businesses will use the opportunity to price gouge and the RBA has given them an easy scapegoat. At least now they'll be forced to gouge transparently instead of in a hidden surcharge.

 

[QfHrGr]

Except before you had by law an alternative, now you don't. If it said $99 before and you handed over $99 in cash then that was all you paid. Now the sign says $101 and handing over $99 in cash doesn't cut it anymore.

AFAIK that same law also stipulated that a surcharge for card payments cannot be made if an alternative payment like cash or direct deposit etc was not made available. There were payment by card only businesses that still charge the surcharge (Avis being an example) regardless. I'm glad that greed is finally blanket banned. Unfortunately, this RBA change (reversion to what was before it approved the stampede causing surcharge bandwagon in 2003) does not cover payments by Amex and any other non bank issued cards so expect those will continue post 1 Oct, as was the case before 1 Jan 2003 except the hike in the Amex surcharge % will not likely revert. Not sure what the situation will be for bank issued Amex then.

 

[HMcM]

Most people pay by card not cash. So most people will pay the same or less.

How the heck do you propose they will pay less? Most people will pay the same, effectively nobody will pay less and people who pay exclusively with cash (you know, generally older people who are on a lower income) will indeed pay more.

To cover lost surcharge income, prices would only need to rise by the surcharge amount, meaning the total price paid remains the same. The only difference is it's now shown to you as the total price before you pay, instead of being sneakily added on after you tap your card.

The price remains the same if you pay by the most expensive payment method, it goes up if you pay with a less expensive method. If you cannot charge more for the more expensive method then you have to assume that will be the method people will pay with and charge accordingly.

AFAIK that same law also stipulated that a surcharge for card payments cannot be made if an alternative payment like cash or direct deposit etc was not made available.

A law I agree with. There should be a method to pay the advertised price.

There were payment by card only businesses that still charge the surcharge (Avis being an example) regardless.

Then the government should go after them and force them to offer a payment method at the advertised cost.

I'm glad that greed is finally blanket banned.

Greed is about as innately human as it comes, it can never be banned.

Unfortunately, this RBA change (reversion to what was before it approved the stampede causing surcharge bandwagon in 2003) does not cover payments by Amex and any other non bank issued cards so expect those will continue post 1 Oct, as was the case before 1 Jan 2003 except the hike in the Amex surcharge % will not likely revert. Not sure what the situation will be for bank issued Amex then.

This is in no way a reversion to pre-2003 though. Pre-2003 surcharges were absolutely legal, they were simply forbidden by the card payment networks. In 2003 the RBA forbid Mastercard and Visa from having that clause in their contracts which lead to businesses making surcharges. Now surcharges are being banned at the legal level and the government is price fixing the interchange fees. A pre-2003 system would be much better for most of us than this change.