Card payment sucharges banned in Australia from 2026

kpc said:
Whilst I have benefitted from SUBs myself, I'm not surprised they will get less. I would personally prefer no surcharges at the expense of large SUBs!
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Best to have the price that is marked on the goods purchased is the price charged by the merchant to the consumer. Silly to have surcharges on the advertised prices (e.g. cc-surcharges, weekend surcharges - in the latter case, the business simply should have a different menu for the weekend if it wants to have higher prices then).
 
I suspect many small businesses may up their prices and introduce a discount for cash.
They want cash so it doesn’t go through the books.
Just like employing backpackers/international students, paying under award wages in cash that they don’t put through the books.
 
gfm said:
Best to have the price that is marked on the goods purchased is the price charged by the merchant to the consumer. Silly to have surcharges on the advertised prices (e.g. cc-surcharges, weekend surcharges - in the latter case, the business simply should have a different menu for the weekend if it wants to have higher prices then).
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There is a legal exemption in the law for weekend and public holiday surcharges.
It was considered wasteful to mandate they produce separate menus.
 
oz_mark said:
That's true, although when the made that move in 2003, cash was the main form of payment. That has change in the last 20 years, to the extent that many people don't even carry cash now (and thus can't avoid a surcharge).
While I don't agree with what they did, it seems reasonable to reconsider the situation given the way in which most payments are now made by card.
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Agree, when surcharges were first allowed the argument was that the banks had to invest a considerable amount in the infrastructure to support cards and it was fair to recoup some of that expenditure.
Surcharging should probably have had a sunset clause when certain transaction volumes were hit, the banks have well and truly paid off that expense and is anything cash is the thing that should be surcharged. Electronic payments are now much cheaper than cash for the banks!
 
burmans said:
Agree, when surcharges were first allowed the argument was that the banks had to invest a considerable amount in the infrastructure to support cards and it was fair to recoup some of that expenditure.
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The ACCC probably had a pretty big say in this decision as well. There was a feeling that no surcharging was preventing consumers from 'seeing' the true costs of using different card schemes. It was hoped that allowing surcharging would mean that businesses passes on the costs to the consumer, so they would choose the cheapest form of payment, or pay a fee for the convenience or rewards of a more expensive card. However, much has been done in the area since then. One is that surcharging rates were often uniform, so it ended up just being a blanket 1.5% charge for any card, rather than say being most expensive for AMEX and then very cheap for Eftpos for example. Obviously, that doesn't incentivise much, but just punishes the use of cards. Then, RBA did some work with capping interchange fees and least cost routing, so the actual cost of accepting card on the business side is much lower than in 2003.
 
Glad to see that at least a couple of posters remember it was thanks to the RBA 20 odd years ago that these fees were introduced.
I had hoped to see some media articles mentioning it, but I guess the journalists are all too young to remember.....
 
Why can't it be a choice for consumers in terms of what happens in this space? Why can't it be that the card product they choose determines their outcome; much like it is with someone choosing AmEx in this region, currently.

If someone only has a credit card because they need it to make ends meet, extend payment terms, etc., then they are probably not overly concerned with rewards and such, and ideally the RBA or whoever else needs to or will do what they can to minimize or remove any surcharges for these folks and/or for basic card products.

On the other hand, if I choose to have an ultra-premium credit card which offers me greater rewards, added protections and other benefits (e.g. lounge access, travel discounts, hotel memberships, etc.), then it should be my choice to pay a higher fee and perhaps additional surcharges for it's transactional use, as well. I'm sure if they wanted to that the financial institutions themselves could determine the transaction costs necessary to offset merchant fees and feed them back to the cardholders through account charges, rather than involving the individual retailers / merchants. Ideally this % should never exceed the status quo charged through the merchants.

While I appreciate the thought of paying 1.5% less for any card transactions which I make, I don't know that I could replace the value of those rewards, protections and other benefits I get from my current card(s) with those relatively small annual savings.

Cheers,
Matt.
 
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dairyfloss said:
If someone only has a credit card because they need it to make ends meet, extend payment terms, etc., then they are probably not overly concerned with rewards and such, and ideally the RBA or whoever else needs to will do what they can to minimize or remove any surcharges for these folks and/or for basic card products.
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The RBA did consider allowing the continuation of differential surcharges for different card types, however simplifying the system was considered a higher priority. (page 23)
  • Removing surcharging would substantially simplify enforcement and lessen the cost of compliance in the card payments system as merchants would not need to engage with the potential complexities of calculating their costs of acceptance. Identifying the presence of surcharges would be much easier than assessing excessive surcharging under the current surcharging framework that requires knowledge of each merchant’s cost of acceptance. By contrast, retaining the surcharging framework in some form via Options 1 or 2 would require higher costs of compliance and enforcement of the framework.
  • Removing surcharging would be less costly for PSPs to implement and less disruptive to existing business models than only removing debit surcharges, which would otherwise increase costs in the card payments system.
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If Amex wants to, it can continue charging higher merchant fees and permit surcharges.

The RBA caps and surcharge bans don’t apply to it.

But given their strategy after the last round of RBA reforms was to reduce fees and boost merchant acceptance, I suspect they will double down on this strategy to compete.

Still, they will have the capacity to offer more perks than bank issued cards.
 
levelnine said:
This strikes me as potentially quite significant for the points space in Australia.

It is going to put pressure on points issuers to justify the surcharges that credit card transactions will attract if debit cards become fee free.
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The potential illegality of surcharges for credit cards in Australia might have strong implications for FF points. In the event retailers look to other payment systems which have cheaper transaction fees there may be pressure on credit cards to drop fees. This will have an immediate effect of either reducing the amount of points they allocate per transaction or (I think more likely) a pretty sharp devaluation of CC points. For those already with points, fewer earned per transaction would be by far the better outcome but I feel far less likely.
 
Every proposal that supposedly improves transparency seems to end up having the opposite effect. Rather than prices coming down, competing business realise "Oh THEY CHARGE THAT MUCH? Now we should too"...
 
I'm curious to know how AFF and parent companies feel about this topic considering it would surely take a large hit to their revenue steams if credit card sign up bonuses are reduced due to a reduction in interchange fees and money floating around the system to pay for reward points etc.
 
flyguy77 said:
I'm curious to know how AFF and parent companies feel about this topic considering it would surely take a large hit to their revenue steams if credit card sign up bonuses are reduced due to a reduction in interchange fees and money floating around the system to pay for reward points etc.
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kpc

Post in thread 'Card payment sucharges banned in Australia from 2026'

levelnine said:
Rewards can be devalued a whole lot more.

These are currently what are considered the best credit card sign-up bonuses in the UK:
View attachment 457943
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Whilst I have benefitted from SUBs myself, I'm not surprised they will get less. I would personally prefer no surcharges at the expense of large SUBs!
  • Agree
  • Like
 
And there's a quote from an AFFer. in the aforementioned article:

"Matt Graham, editor of Australian Frequent Flyer, said the proposed surcharge ban and lowering of the interchange fee cap had become a hot-button issue on his website’s forum, with members concerned about looming changes."
 
kpc said:
Whilst I have benefitted from SUBs myself, I'm not surprised they will get less. I would personally prefer no surcharges at the expense of large SUBs!
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I agree completely. IMO, frequent flyer benefits should mostly come from frequent flying. This credit card sign up bonus thing has got completely out of control. Just look at the USA.
 
clifford said:
I agree completely. IMO, frequent flyer benefits should mostly come from frequent flying. This credit card sign up bonus thing has got completely out of control
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That is true. The easier you make it for people to earn points the harder it is to find a reward seat (even economy).
 

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