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.

 

[drron]

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.

I totally agree. I know I haven’t paid a surcharge at petrol stations as I have to keep my receipts for 7 years.
Never at a supermarket but I don’t shop at Aldi
Fortunately most of the restaurants we have been going to the only surcharge has been for weekends and public holidays which we rarely go out on.
Airline fee again as international flights are usually awards and nearly half of them are AA awards and their fees are very low.
Haven’t been to a coffee shop since COVID.

 

[HappyFlyerFamily]

How would adding surcharges not lose business? Surely, if they had not added them, that would be a point of difference compared to their competitors?

Perhaps demand is inelastic or not price sensitive or the % quantity of lost business is less than the surcharge.

From what I observed over the years sone of the hospitality groups introduced surcharge at some venues (as a trial) and then widen their scope and then competitors join in the surcharging.

Sometime economic theory doesn’t explain the overall reality / outcome.

As I said with the EatClub scenario, some times business will try something new but find out it doesn’t work for them and in these business the assumption would be that they were found to have improved their overall business outcomes by charging surcharges.

 

[JohnK]

How do you plan on saving a fortune if hotels simply raise their price by the amount of the surcharge and incorporate it into the price?

By having the choice of choosing hotel based on knowing final price and not having to guess.

If some hotels increase their room rates to incorporate the surcharge then I can consider other hotels.

 

[HMcM]

By having the choice of choosing hotel based on knowing final price and not having to guess.

If some hotels increase their room rates to incorporate the surcharge then I can consider other hotels.

Maybe it's just how I am wired but I really did not find it difficult to figure out the surcharge amount when comparing multiple different things.

It typically fell into 2 categories, so insignificant that I don't care (if I am staying one night at a place and spending $3 more in fees it doesn't really matter), or it is a big enough difference that I would properly compare.

Sure, it required clicking through to a website or asking ChatGPT to add an extra thing to compare, but if you were price conscious before it wasn't that hard.

 

[MEL_Traveller]

Maybe it's just how I am wired but I really did not find it difficult to figure out the surcharge amount when comparing multiple different things.

It typically fell into 2 categories, so insignificant that I don't care (if I am staying one night at a place and spending $3 more in fees it doesn't really matter), or it is a big enough difference that I would properly compare.

Sure, it required clicking through to a website or asking ChatGPT to add an extra thing to compare, but if you were price conscious before it wasn't that hard.

i’m pretty sure accor didn’t have it prominently displayed, and i was slugged a fair whack on check out! (in australia)

 

[HMcM]

i’m pretty sure accor didn’t have it prominently displayed, and i was slugged a fair whack on check out! (in australia)

I never had issue with either putting in a quick test booking to check out the final price or simply googling what the surcharge with each hotel was. Looks like it was around 1.4% for Accor.

 

[MEL_Traveller]

I never had issue with either putting in a quick test booking to check out the final price or simply googling what the surcharge with each hotel was. Looks like it was around 1.4% for Accor.

Sure. But why was t this disclosed I. The book g page? Or maybe it was, but I didn’t see it!

Which is another problem, Accor markets and sells in Australia but is somehow allowed to get away with component pricing… listing taxes after you’ve selected the room rate

 

[oz_mark]

Sure. But why was t this disclosed I. The book g page? Or maybe it was, but I didn’t see it!

Which is another problem, Accor markets and sells in Australia but is somehow allowed to get away with component pricing… listing taxes after you’ve selected the room rate

Pretty sure booking platforms based overseas (such as Accor) generally base it on the local market of the hotel. For an Australian hotel, you'll get a fully inclusive price. For a Singapore hotel (for example) you'll get one the excludes some taxes and charges

 

[esseeeayeenn]

Pretty sure booking platforms based overseas (such as Accor) generally base it on the local market of the hotel. For an Australian hotel, you'll get a fully inclusive price. For a Singapore hotel (for example) you'll get one the excludes some taxes and charges

Agree, Australian prices are inclusive, whereas in France, for example, there is a tax per person per night which, by law, must be charged separately, and cannot be bundled into the overall accommodation cost.

On another note, Accor hotels in Australia don't accept cash, so unless that changes, they won't be offering a cash discount.

 

[MEL_Traveller]

Agree, Australian prices are inclusive, whereas in France, for example, there is a tax per person per night which, by law, must be charged separately, and cannot be bundled into the overall accommodation cost.

On another note, Accor hotels in Australia don't accept cash, so unless that changes, they won't be offering a cash discount.

And so they should comply with all local laws. But we are in Australia so when the hotel in Bali or wherever comes with the main price and then tax extra I don’t think that’s acceptable. If you want to sell and market in Australia then comply with Australian laws. Every airline manages to do it I don’t think hotel should be exempt.

I’m glad companies like Accor can no longer charge a surcharge in Australia when paying by credit card.

 

[esseeeayeenn]

And so they should comply with all local laws. But we are in Australia so when the hotel in Bali or wherever comes with the main price and then text extra I don’t think that’s acceptable. If you want to sell and market in Australia then comply with Australian laws. Every airline manages to do it I don’t think hotel should be exempt.

I’m glad companies like Accor can no longer charge a surcharge in Australia when paying by credit card.

Australian laws don't trump the laws of the country where the hotel is located.
These taxes are often levied by local governments. I remember when I first went to Europe, these local taxes had to be paid in cash!
Only Americans imagine their laws have some kind of global override.

 

[MEL_Traveller]

Australian laws don't trump the laws of the country where the hotel is located.
These taxes are often levied by local governments. I remember when I first went to Europe, these local taxes had to be paid in cash!
Only Americans imagine their laws have some kind of global override.

But the accor site is the only one to list prices without tax. You go through expedia or other hotel chains and the price is all inclusive.