Card payment sucharges banned in Australia from 2026

[Ansett Nostalgic]

This RBA Governor should be fired.

 

[albyd]

It’s one thing to ban surcharging, it’s another matter to reduce interchange to where it can’t fund reward programs which is why they’re going away.

 

[CaptJCool]

If the interchange fees are indeed “funding” rewards programmes then that tells you they are overpriced.

That said, when I got sent my Platinum card, I didn’t realise at the time that meant the merchant fees charged by the provider were “doubled”

So it’s not always obvious who’s profit gouging out of the system. But it sure ain’t a case of covering the “cost of acceptance”. If we were to start that argument, then cash banknotes would need to incur a “cost of acceptance” as that’s not a “free” service to the banking system. Rather it’s a service where the fees are “covered by the provider”

 

[LondonAussie]

I don’t know what it is, but there must be something fundamentally different about Australia’s banking system compared to other countries. Which is odd because on the surface it seems like the same Visa and Mastercard issued cards that you get almost everywhere on earth.

I’ve travelled extensively and the surcharging epidemic hasn’t reached other countries. It’s got out of control in Australia while in most other places it’s still rare to see a surcharge, or was outright banned years ago.

The other thing I’ve noticed is outside of Australia, restaurants and cafes are more than happy to split bills and take payments across multiple cards, separately from everyone on the table. Ask to do that in Australia and you get treated like you asked for a kidney. I wonder if it’s something to do with keeping the number of card transactions to a minimum.

 

[albyd]

If the interchange fees are indeed “funding” rewards programmes then that tells you they are overpriced.

That said, when I got sent my Platinum card, I didn’t realise at the time that meant the merchant fees charged by the provider were “doubled”

I think the whole thing about giving us metal coloured cards is to make us feel ‘special’ as well as getting a higher merchant fee as suddenly that’s a ‘premium’ card.

If the banks are giving us rewards funded out of interchange, then their profit margin as well as costs like bad debts, etc also need to come out of that funding. I’m assuming that’s why they’re stomping (without much effect or sympathy from the RBA) their feet about about removing rewards and other benefits.

There’s not room for everything in the reduced funding envelope. We can feel as smug as we like about it but the banks aren’t charities and they’ll be fine. Cashless is ingrained in our culture so the rewards points were partially to encourage us to use them for everyday transactions. We might just switch our activity and behavior to eftpos. We’re now cashless. Mission accomplished!

 

[dajop]

If the banks are giving us rewards funded out of interchange, then their profit margin as well as costs like bad debts, etc also need to come out of that funding. I’m assuming that’s why they’re stomping (without much effect or sympathy from the RBA) their feet about about removing rewards and other benefits.

Don’t forget that bad debts are funded out of interest rate margins as well. When charging 20% interest and offering at most 4.5% for deposits (or charging 6% for mortgages), there’s a bit of wiggle room there.