Card payment sucharges banned in Australia from 2026

[WilsonM]

What do people think are the implications for payment processors like pay. com (who share ownership with AFF). Will they change rates? Close down?

What are the implications for a website like AFF (and it's sister site Point Hacks) which have relied on credit card sign ups for income? Surely this will have an affect on profits.

Honestly, depends really on what the banks do - their margin is reduced, so they'll either pay sites less for sign ups, reduce bonuses or increase fees. Most likely a combination of all 3. But if offers go down, less people take out cards, less profit for banks and websites that earn money from credit card sign ups.

Payment processors seem less affected - especially if AMEX holds its earn rates up, as many people use points earned from business spend for personal use so its a just a way around that.

 

[burmans]

Different circumstances. In 2003 a lot of people still paid cash. The fee seemed reasonable then.

Particularly as the banks had to make a considerable investment in technology to support electronic payments. Whereas now that technology has largely been well and truly paid for and cash is actually much more expensive than electronic payments!

 

[Pete98765432]

So they'll increase the price of the $5 coffee to $5.10, and everyone will complain the price went up 10c without realising they were always paying $5.10 for it and got fooled by the $5 + 2% surcharge price tag.

Funnily, I don’t recall cafes reducing their (cash) prices when they introduced a surcharge.

 

[transpactraveller]

Or they'll all put the price to $5.20 and make even more...

And there's nothing stopping them doing that already, with or without surcharge.

 

[dairyfloss]

They're all saying how they'll need to increase prices to cover the surcharge, but all they're really doing is including the surcharge amount in the advertised price. So the price will be the same unless you were previously paying cash.

So they'll increase the price of the $5 coffee to $5.10, and everyone will complain the price went up 10c without realising they were always paying $5.10 for it and got fooled by the $5 + 2% surcharge price tag.

Yes - like I said… ‘offset’ (or more)

 

[kyle]

In the interviews I’ve seen with various outlets today, after the news came out, basically every retailer and small business association spokesperson have confirmed they will just need to or expect to see prices increased to offset this, when the time comes That revenue expectation is baked in now, however small.

Basically, we’ve all paid some consultants and the RBA to devalue rewards credit cards for us. Huzzah!

I said it many times, how did those businesses survive before surcharging came in?

 

[AuSammy]

My two bugbears are:

- its supposed to be illegal to put a price on a retail item that is not the final price (ie not declare taxes and fees etc) why is this exception allowed?

- it is more expensive for honest retailers and banks to handle cash than to process electronically yet they give a “discount” for cash (many because of undeclared income) and place an impost on the easiest and quickest way to increase their bank balance/reduce their overdraft.

 

[flyguy77]

And there's nothing stopping them doing that already, with or without surcharge.

No there's not - but this gives business a good 'excuse' to increase prices.

 

[Rich]

I don't know why some people are complaining that businesses are going to increase prices. At some point that $5.00 ($5.07 with surcharge say) coffee is going to be increased to $5.20 regardless. The surcharge may have even delayed that increase so far. The cafe that delays an increase will get more business. We can shop elsewhere or not shop. It's capitalism.

 

[Zero]

Could a business keep surcharging by instead offering a cash discount instead of a card surcharge?

For example, Today you might buy a $5 coffee, tap your card and get charged $5.10.

After October, they'll update the price to $5.10, you tap your card and still pay $5.10.

But could they put up a sign that, for example, says "Coffee - $5.10 - or $5 cash only price"

Taking us back to exactly where we were before the ban, just advertised in the opposite way.

Would that be legal?

I don't think there is anything stopping businesses from charging you less than they say they will.

Some places have a 5% discount for cash already, which is really a ~6-7% discount because they also have a card surcharge (but effectively it's a 6-7% surcharge). So currently it is never possible to pay the advertised price. I wonder whether these places will update their cash discount to 6-7%....

 

[MEL_Traveller]

They're all saying how they'll need to increase prices to cover the surcharge, but all they're really doing is including the surcharge amount in the advertised price. So the price will be the same unless you were previously paying cash.

So they'll increase the price of the $5 coffee to $5.10, and everyone will complain the price went up 10c without realising they were always paying $5.10 for it and got fooled by the $5 + 2% surcharge price tag.

Right. The price you PAY won’t go up. But the price of the underlying item or service will go up.

Problem is that the price you pay will increase more than the surcharge currently is.

And then business will complain that people are complaining and not buying, or reducing their buying.

 

[transpactraveller]

Problem is that the price you pay will increase more than the surcharge currently is.

Why's that? The war, fuel prices and general inflation?

If it was just in relation to the surcharge changes, they should actually increase the price by less than the surcharge, because that cost will now be spread amongst all customers, not just card payers.

 

[MEL_Traveller]

Why's that? The war, fuel prices and general inflation?

If it was just in relation to the surcharge changes, they should actually increase the price by less than the surcharge, because that cost will now be spread amongst all customers, not just card payers.

Because some businesses take any and every opportunity to put up prices

 

[nomadscientist]

I think the RBA has missed the best solution:

- reduce interchange rates for personal non-premium cards
- keep higher interchange rates for personal premium cards and let merchants collect a surcharge

That way, banks would still have opportunities to give incentives for premium cards. And non-premium cardholders would not subsidise the premium ones.

I know that the RBA wanted to increase transparency, but with business cards (and AMEX, possibly even mobile wallets) receiving separate treatment, I can’t see another tier hurting transparency. And since VISA/MasterCard can apparently distinguish between personal and business cards during transactions, there should be no technical hurdle to code non-premium vs premium into the card.

The biggest concern I have with the current ruling is that personal cardholders will now subsidise business cardholders!