Card payment sucharges banned in Australia from 2026

[esseeeayeenn]

Let me get this straight.
The small percentage fee on a credit card transaction will be removed.
As a consequence:

(1) The businesses which were charging the fee will compensate for it by increasing prices;
(2) Some businesses will offer a discount for cash payments: the figure of 5% is floating around;
(3) Banks will offset the lost revenue by reducing or removing the rewards we earn, including QF or VA points;
(4) Banks will also offset the same lost revenue by reducing other benefits such as included (not complimentary) insurance; and
(5) Banks will increase annual credit card fees to replace, rather than offset the same lost revenue.

But (1) implies that businesses would continue to incur the same bank fees which they were passing on to customers through the surcharges.
If not, there would be no need to increase prices.
And (2) implies that those bank fees are still incurred for card transactions, or there would be no incentive to offer a discount for cash payments.
The discount offered pursuant to (2) is effectively just reinstating the fee, in different words, so I am surprised it will be permitted.
Further, 5% is well and truly in excess of the current fees, so it is unjustified and the consumer will be worse off.
We will be paying an effective card payment fee of 5% instead of the current, much lower percentage fee.
And I imagine the definition of "cash" will be narrower than the current scope of payments which allow us to avoid the credit card fee:
PayTo or BPay or any other EFT bank transfer will probably not count as "cash".

However, assuming that businesses will continue to incur the same bank fees, then there should be no lost revenue for the banks to replace or offset.
So there should be no need for (3), (4) or (5) and certainly not for all of them!
In particular, banks should be doing only (3) & (4), or just (5).
There is no justification for replacing and offsetting the same lost revenue.

On the other hand, if banks were actually losing revenue, that would mean they were charging businesses less.
In which case there should be no need for (1) or (2).

Whichever way you look at it, banks and businesses are both using the changes as an excuse to fleece us all.

This should come as no surprise.
Small businesses lobbied forever for reform to penalty rates, claiming it would lead to lower prices.
Yet when penalty rates were reformed, prices never fell.
Restaurants and even fast food outlets like Dominos still impose a Sunday surcharge.

 

[Ansett Nostalgic]

Let me get this straight.
The small percentage fee on a credit card transaction will be removed.
As a consequence:

(1) The businesses which were charging the fee will compensate for it by increasing prices;
(2) Some businesses will offer a discount for cash payments: the figure of 5% is floating around;
(3) Banks will offset the lost revenue by reducing or removing the rewards we earn, including QF or VA points;
(4) Banks will also offset the same lost revenue by reducing other benefits such as included (not complimentary) insurance; and
(5) Banks will increase annual credit card fees to replace, rather than offset the same lost revenue.

But (1) implies that businesses would continue to incur the same bank fees which they were passing on to customers through the surcharges.
If not, there would be no need to increase prices.
And (2) implies that those bank fees are still incurred for card transactions, or there would be no incentive to offer a discount for cash payments.
The discount offered pursuant to (2) is effectively just reinstating the fee, in different words, so I am surprised it will be permitted.
Further, 5% is well and truly in excess of the current fees, so it is unjustified and the consumer will be worse off.
We will be paying an effective card payment fee of 5% instead of the current, much lower percentage fee.
And I imagine the definition of "cash" will be narrower than the current scope of payments which allow us to avoid the credit card fee:
PayTo or BPay or any other EFT bank transfer will probably not count as "cash".

However, assuming that businesses will continue to incur the same bank fees, then there should be no lost revenue for the banks to replace or offset.
So there should be no need for (3), (4) or (5) and certainly not for all of them!
In particular, banks should be doing only (3) & (4), or just (5).
There is no justification for replacing and offsetting the same lost revenue.

On the other hand, if banks were actually losing revenue, that would mean they were charging businesses less.
In which case there should be no need for (1) or (2).

Whichever way you look at it, banks and businesses are both using the changes as an excuse to fleece us all.

This should come as no surprise.
Small businesses lobbied forever for reform to penalty rates, claiming it would lead to lower prices.
Yet when penalty rates were reformed, prices never fell.
Restaurants and even fast food outlets like Dominos still impose a Sunday surcharge.

An excellent explanation of why like so many other government regulations, either nothing changes in substance or people are actually worse off.

 

[esseeeayeenn]

Clearly you have never been in business MEL - that is the simplest equation I have ever seen

Let's take an example with a hypothetical cup of coffee for $5.
The assumption is that the business wants to keep $5 from each and every customer, regardless of payment method.
Currently an advertised price of $5 with a credit card surcharge of 2% would lead to a charge of $5.10 for customers paying by card.
Increasing the price to allow a 5% discount for cash would mean an advertised price of $5.25.
Customers paying by card would pay $5.25 while customers paying in cash would pay $5.00.
How is the additional 25 cents not overcompensation for the loss of 10 cents?

Of course this is a gross simplification.
But to make the example realistic we would to know how many customers currently pay by card or in cash, and how this would change in the future.

 

[Infrequent traveller]

Let me get this straight.
The small percentage fee on a credit card transaction will be removed.
As a consequence:

(1) The businesses which were charging the fee will compensate for it by increasing prices;
(2) Some businesses will offer a discount for cash payments: the figure of 5% is floating around;
(3) Banks will offset the lost revenue by reducing or removing the rewards we earn, including QF or VA points;
(4) Banks will also offset the same lost revenue by reducing other benefits such as included (not complimentary) insurance; and
(5) Banks will increase annual credit card fees to replace, rather than offset the same lost revenue.

But (1) implies that businesses would continue to incur the same bank fees which they were passing on to customers through the surcharges.
If not, there would be no need to increase prices.
And (2) implies that those bank fees are still incurred for card transactions, or there would be no incentive to offer a discount for cash payments.
The discount offered pursuant to (2) is effectively just reinstating the fee, in different words, so I am surprised it will be permitted.
Further, 5% is well and truly in excess of the current fees, so it is unjustified and the consumer will be worse off.
We will be paying an effective card payment fee of 5% instead of the current, much lower percentage fee.
And I imagine the definition of "cash" will be narrower than the current scope of payments which allow us to avoid the credit card fee:
PayTo or BPay or any other EFT bank transfer will probably not count as "cash".

However, assuming that businesses will continue to incur the same bank fees, then there should be no lost revenue for the banks to replace or offset.
So there should be no need for (3), (4) or (5) and certainly not for all of them!
In particular, banks should be doing only (3) & (4), or just (5).
There is no justification for replacing and offsetting the same lost revenue.

On the other hand, if banks were actually losing revenue, that would mean they were charging businesses less.
In which case there should be no need for (1) or (2).

Whichever way you look at it, banks and businesses are both using the changes as an excuse to fleece us all.

This should come as no surprise.
Small businesses lobbied forever for reform to penalty rates, claiming it would lead to lower prices.
Yet when penalty rates were reformed, prices never fell.
Restaurants and even fast food outlets like Dominos still impose a Sunday surcharge.

And the whatever percentage price increase will eventually be reflected in the CPU, so a heightened inflation for the highly paid RBA Board to make the only ineffective decision of hiking interest rates to rein in inflation. I would imagine just the sacking of the entire RBA Board would be sufficient to bring the unemployment rate high enough to curb any concern on continued inflationary pressure

 

[Berlin]

Well- my gym will simply forgo the former credit card surcharge. There have been two new gym openings in the same block alone over the past year and the owner of mine told me that there’s simply no way for him to raise prices.

This alone saves me more than any pub or cafe could ever charge me extra. Add airlines and hotels and I’m definitely in the plus, even if I have to pay my strata fees through a third party provider that still accepts credit cards from now on.