Card Payment Surcharges Banned in Australia from 2026

[esseeeayeenn]

I just realised this is very similar to the unintended consequences of the RBA decision to ban the interchange fee on ATM transactions in March 2009.

It was supposed to lower fees for consumers.
In fact, it has led to a massive decline in the number of bank-owned ATMS.
They are being replaced by ATMs owned by third parties.
Who charge a fee per transaction which is higher than the old interchange fee.

This confirms my complete lack of confidence in economists to understand the real world.
Worse, they don't want to understand the real world.
The rhetoric coming from the RBA is basically saying businesses aren't reacting in the way they should.
This is a real world example of the concept of "irrational actors" which economists use as an excuse when their models don't predict real world events.

 

[oz_mark]

I just realised this is very similar to the unintended consequences of the RBA decision to ban the interchange fee on ATM transactions in March 2009.

It was supposed to lower fees for consumers.
In fact, it has led to a massive decline in the number of bank-owned ATMS.
They are being replaced by ATMs owned by third parties.
Who charge a fee per transaction which is higher than the old interchange fee.

I would suggest the decline in ATMs started occuring after NAB (and other banks) stopped charging the $2 for using other bank ATMs in 2017. While it was intertwined with a move to using less cash, being able to use any ATM meant they didn't have to install so many ATMs for their own customers.

 

[esseeeayeenn]

I would suggest the decline in ATMs started occuring after NAB (and other banks) stopped charging the $2 for using other bank ATMs in 2017. While it was intertwined with a move to using less cash, being able to use any ATM meant they didn't have to install so many ATMs for their own customers.

Ummm the fee you are referring to is the interchange fee I was referring to.

 

[oz_mark]

Ummm the fee you are referring to is the interchange fee I was referring to.

Although after the 2009 changes, the ATM network continued growing. Banks were still charging the 'foreign ATM fee'. All that happened was that the ATM operator got to keep 100% of the fee. THE RBA also mandated that the fee be displayed (rather than just appearing as a fee in your account at the end of the month). It was, however, a lucrative business, and if anything led to a boom in ATMs.

It was not until the banks dropped the foreign fee in 2017 (8 years later) that ATM numbers started to decline. However, the reduction in cash usage has also played a role in declining need for ATMs.

 

[transpactraveller]

The ATM thing is a bit like card surcharges and businesses not realising the cost of handling cash is often higher than accepting cards. There's a reason "card only" became the norm in the UK & parts of Europe.

Maintaining an ATM network and restocking cash in ATMs is actually quite an expensive operation! Banks started to realise that the cost of providing their own ATMs was actually higher than the costs the other banks would charge them to use theirs!

 

[MEL_Traveller]

I just realised this is very similar to the unintended consequences of the RBA decision to ban the interchange fee on ATM transactions in March 2009.

It was supposed to lower fees for consumers.
In fact, it has led to a massive decline in the number of bank-owned ATMS.
They are being replaced by ATMs owned by third parties.
Who charge a fee per transaction which is higher than the old interchange fee.

This confirms my complete lack of confidence in economists to understand the real world.
Worse, they don't want to understand the real world.
The rhetoric coming from the RBA is basically saying businesses aren't reacting in the way they should.
This is a real world example of the concept of "irrational actors" which economists use as an excuse when their models don't predict real world events.

Re last para… i guess this comes down to essential v non-essential spend?

For me, the surcharge removal has worked perfectly. But I refuse to buy a $8 cup of coffee, or $21 sandwich from a small cafe.

Sticking to the major outlets… petrol, supermarkets, airline tickets, hotels… my costs have gone down. Exactly as intended. And places like green grocers… well… prices are seasonal so it’s hard to tell, but they’re cheaper than the supey so I’m happy with that, and no surcharge now.

 

[esseeeayeenn]

Sticking to the major outlets… petrol, supermarkets, airline tickets, hotels… my costs have gone down. Exactly as intended. And places like green grocers… well… prices are seasonal so it’s hard to tell, but they’re cheaper than the supey so I’m happy with that, and no surcharge now.

I never paid a card fee at Coles or Woolworths.
I don't think I have paid card fees at service stations.
For airline tickets, I always avoided these with QF by buying a gift voucher.
I will give you hotels, but otherwise I haven't really benefitted from this.

 

[MEL_Traveller]

I never paid a card fee at Coles or Woolworths.
I don't think I have paid card fees at service stations.
For airline tickets, I always avoided these with QF by buying a gift voucher.
I will give you hotels, but otherwise I haven't really benefitted from this.

aldi had a card surcharge…

But for airline tickets.. the protections of insurance and ability to chargeback were compelling reasons for using credit cards.

People complain about the price increases… but still go to the coffee shop or cafe. These increases are voluntary and can be avoided.