Card payment sucharges banned in Australia from 2026

[kpc]

Go Michele!

Bullock blasts banks as she presses to end card surcharges

Reserve Bank governor Michele Bullock has ridiculed the nation’s banks and credit card providers, dismissing claims they will cut spending to prevent card fraud in response to plans by the RBA to slash fees paid by shoppers when they use their 60 million credit and debit cards.

In some of her strongest ever public comments, Bullock used a parliamentary committee to round on the banks while accusing them of effectively “shooting themselves in the foot” by trying to protect their profit margins and incentives to high-income customers to continue using credit cards.

Bullock blasts banks as she presses to end card surcharges

RBA governor Michele Bullock has accused the banks of “shooting themselves in the foot” by trying to protect their incentives to high-income customers to continue using their credit cards.

www.smh.com.au

 

[levelnine]

Yes, the RBA is completely unphased by the banks' efforts to save the existing arrangements:

'She also questioned the fairness of frequent flyer points linked to credit card loyalty programs, saying younger, lower-income consumers were unfairly paying hidden fees that funded rewards for wealthier people.'

Bullock calls banks’ bluff on card fees, attacks frequent flyer points

RBA governor Michele Bullock says banks would be “shooting themselves in the foot” by cutting investment in fraud prevention because of the push to lower card fees

www.afr.com

It's looking more and more likely that the points game as we know it will come to an end.

 

[daft009]

Yes, the RBA is completely unphased by the banks' efforts to save the existing arrangements:

'She also questioned the fairness of frequent flyer points linked to credit card loyalty programs, saying younger, lower-income consumers were unfairly paying hidden fees that funded rewards for wealthier people.'

Bullock calls banks’ bluff on card fees, attacks frequent flyer points

RBA governor Michele Bullock says banks would be “shooting themselves in the foot” by cutting investment in fraud prevention because of the push to lower card fees

www.afr.com

It's looking more and more likely that the points game as we know it will come to an end.

Pfft younger people use debit or BNPL services

 

[burneracc]

Pfft younger people use debit or BNPL services

sadly, can confirm

 

[Aeryn]

Terminals can already tell difference between Credit and Debit cards; and most have lower fees for Debit. I have no problem with them abolishing debit card fees (note this will probably mean instead of tap and go, you need to insert card and select savings or remove the via/mastercard cobranding from debit cards and go back to eftpos branding).

I would also surmise that whilst rewards credit cards maybe be partially funded by surcharges, that annual fees and more importantly interest funds a much higher proportion.

Abolishing fees for CCs wont sop those with poor financial management skills subsidizing wealthier customers because they will still be paying interest albeit likely at a higher rate to make up for the surcharge losses.

 

[Waddygib]

Terminals can already tell difference between Credit and Debit cards; and most have lower fees for Debit. I have no problem with them abolishing debit card fees (note this will probably mean instead of tap and go, you need to insert card and select savings or remove the via/mastercard cobranding from debit cards and go back to eftpos branding).

I would also surmise that whilst rewards credit cards maybe be partially funded by surcharges, that annual fees and more importantly interest funds a much higher proportion.

Abolishing fees for CCs wont sop those with poor financial management skills subsidizing wealthier customers because they will still be paying interest albeit likely at a higher rate to make up for the surcharge losses.

I think you'll find that interchange funds frequent flyer points. Annual fees to maybe a small extent depending on the product, but mainly it covers the insurance, lounge access, perks etc.

Interest definitely not. It pays for interest expense and credit losses. Remember the biggest earners of points using cards don't pay interest at all (as they tend not to resolve). No way the economics would stack up if they relied on interest revenue to fund reward points.

 

[oz_mark]

Go Michele!

Bullock blasts banks as she presses to end card surcharges

Reserve Bank governor Michele Bullock has ridiculed the nation’s banks and credit card providers, dismissing claims they will cut spending to prevent card fraud in response to plans by the RBA to slash fees paid by shoppers when they use their 60 million credit and debit cards.

In some of her strongest ever public comments, Bullock used a parliamentary committee to round on the banks while accusing them of effectively “shooting themselves in the foot” by trying to protect their profit margins and incentives to high-income customers to continue using credit cards.

Bullock blasts banks as she presses to end card surcharges

RBA governor Michele Bullock has accused the banks of “shooting themselves in the foot” by trying to protect their incentives to high-income customers to continue using their credit cards.

www.smh.com.au

Shame journalists are conflating surcharging and interchange fees

From the article:

Banks and providers such as Visa have vigorously pushed back at a plan by the RBA to ban card surcharges by July next year in a move the bank says would save the nation’s shoppers about $1.2 billion a year

Visa actually supports scrapping surcharges...

 

[CaptJCool]

Here in Fiji
The business pushes surcharges onto customers even for debit cards 3.5-5%

 

[gfm]

Cant we have a system in Australia where the price on the ticket is the price we pay! Otherwise for transparency imagine a price ticket on every item......cash $xx_x, debit card $yyyyy, credit card $zzzzz, Amex $aaaa. Just incorporate all costs into the purchase price and advertise what you need to pay instead of sneaky surcharges.

 

[VPS]

Cant we have a system in Australia where the price on the ticket is the price we pay! Otherwise for transparency imagine a price ticket on every item......cash $xx_x, debit card $yyyyy, credit card $zzzzz, Amex $aaaa. Just incorporate all costs into the purchase price and advertise what you need to pay instead of sneaky surcharges.

Welcome to the USA Where it’s even worse because state taxes vary and they display the price without tax

 

[albyd]

It's looking more and more likely that the points game as we know it will come to an end.

I think that was sadly a foregone conclusion.

The comment period is there to provide a veneer of ‘we gave you a chance to state your case’.

I don’t think we’re going to get any less than the most draconian of outcomes. The party is sadly over

 

[Waddygib]

Cant we have a system in Australia where the price on the ticket is the price we pay! Otherwise for transparency imagine a price ticket on every item......cash $xx_x, debit card $yyyyy, credit card $zzzzz, Amex $aaaa. Just incorporate all costs into the purchase price and advertise what you need to pay instead of sneaky surcharges.

You don't get surcharged for any other cost that you impose on a business from your behaviour (eg taking up staff time with questions about the menu, trying on multiple outfits, creating a mess, using a parking space). Why should one particular customer choice be surcharged?

I actually think the RBA proposal is common sense. If you were designing a payment system from scratch, you'd have zero interchange (or close to it) and no interest free days. Consumers would either use a debit card, or a credit card where they pay interest on funds advanced. High interchange, surcharging, loyalty points......they are fun but the fact that this forum exists is testament to it being a system that benefits some at the expense of others. Kinda seems that - in aggregate - we are worse off, even if a few clearly benefit.

 

[MelbFlyer]

Cant we have a system in Australia where the price on the ticket is the price we pay!

It is already - with GST inclusive.

If you go to somewhere like the U.S. - what you see is not what you pay.

As another poster above mentioned, each state and even county have their own tax rate and it can vary wildly - some more, some less.

So for example, if something is $8.00, you wouldn't know the exact amount of how much it would be until you actually make the purchase (of course, unless you know the tax rate which would apply).

The same item in Long Beach CA would vary in price to the same item in Anaheim CA (merely down the road basically) - Long Beach's tax rate is 10.5% whereas Anaheim's is 7.75%.

Eating out is even worse - it's the price on the menu + tax + gratuity which is at your discretion as to how much, but I think these days it's an expected minimum of 20% of the pre-tax bill (last time I went to the U.S. was in 2019 and the minimum "suggested" gratuity on printed receipts ("checks") was 18% at the time).

In comparison, our inclusive of GST pricing which is an easy, flat 10%, is simple in comparison, let alone not having a gratuity based society / social norm.

 

[oz_mark]

It is already - with GST inclusive.

In comparison, our inclusive of GST pricing which is an easy, flat 10%, is simple in comparison, let alone not having a gratuity based society / social norm.

It's more general than GST inclusive - any ascertainable amounts have to be included in the single price. It's why airlines have to include all the taxes and charges in the price, hire car companies need to include all their charges and so on.

 

[burmans]

It is already - with GST inclusive.

If you go to somewhere like the U.S. - what you see is not what you pay.

As another poster above mentioned, each state and even county have their own tax rate and it can vary wildly - some more, some less.

So for example, if something is $8.00, you wouldn't know the exact amount of how much it would be until you actually make the purchase (of course, unless you know the tax rate which would apply).

The same item in Long Beach CA would vary in price to the same item in Anaheim CA (merely down the road basically) - Long Beach's tax rate is 10.5% whereas Anaheim's is 7.75%.

Eating out is even worse - it's the price on the menu + tax + gratuity which is at your discretion as to how much, but I think these days it's an expected minimum of 20% of the pre-tax bill (last time I went to the U.S. was in 2019 and the minimum "suggested" gratuity on printed receipts ("checks") was 18% at the time).

In comparison, our inclusive of GST pricing which is an easy, flat 10%, is simple in comparison, let alone not having a gratuity based society / social norm.

Have to say that comparing Australia to the worst offender is a pretty low bar. Yes, things are cough in the US (there’s a surprise) but plenty of countries do much better.

 

[serfty]

Eating out is even worse - it's the price on the menu + tax + gratuity which is at your discretion as to how much, but I think these days it's an expected minimum of 20% of the pre-tax bill (last time I went to the U.S. was in 2019 and the minimum "suggested" gratuity on printed receipts ("checks") was 18% at the time).

As a rule of thumb, I worked out that when in the USA, just doubling the USD amount printed on a menu gives a good approximation of the nett AUD cost.

 

[burneracc]

Saw this today and keen to see it end - 1.21% on eftpos infuriates me. 2.75% is also far higher than the cost of accepting Amex.

 

[albyd]

My kids have an infrequent lemonade stall outside my house on hot Sundays. They use Square. Even that is 1.9% for Amex. If you’re charging 2.75%, you either can’t negotiate or taking the piss out of the public.

I paid 3% on a US issued Visa the other night. There was no display of what the charges were on the different cards. I thought the Amex charge was a rip so used my ‘Visa’ but Amex would have been better in hindsight. All the waitress did was shrug her shoulders and try to blame Tyro. Beware of Tyro terminals.

I did manage to get nil surcharge for the same Visa card the other day when there was a $5 surcharge on Amex. You win some, you lose some I guess. I think the days of using foreign cards outside of the big retailers is fast approaching.

YMMV

 

[Mr_Orange]

View attachment 472543Saw this today and keen to see it end - 1.21% on eftpos infuriates me. 2.75% is also far higher than the cost of accepting Amex.

At least they actually displayed their surcharges, even if they might not comply with the RBA regulations to only charge the actual cost.

Most places have nothing or 'a surcharge may apply'. That's not a helpful sign. Well, will it it won't it?

The sooner this nonsense gets banned the better.

That said there are plenty of other surcharges that Australian business like to levy like restaurants that also on a Sunday surcharge as if they didn't know it was Sunday and that they needed to pay penalty rates to their staff. Sundays and Public Holidays are a known quantity that don't vary from year to year and nobody is forcing them to open on those days. Avocado on toast should cost the same on each and every day of the year.

 

[burmans]

View attachment 472543Saw this today and keen to see it end - 1.21% on eftpos infuriates me. 2.75% is also far higher than the cost of accepting Amex.

I personally don’t have such a problem intellectually with surcharges if they are a reasonable % based on actual cost but what has clearly brought us to the current point is that so many places are charging well above that and in many cases actively routing payments to the most expensive route. IMO the RBA had little option than to step on, as always if people had been reasonable this may have gone on for ever but greed got the best of them.