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, to raise the same money another way;
(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.
However, 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.

 

[TheRealTMA]

errrr…. the card surcharge was only 1-1.5%… so a 5% discount for cash? How does that add up?

Money laundering. Pay no tax

 

[Be.au]

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

I don't think it matters whether they 'count as cash' - RBA says a business can offer a discount for other payment methods, it's not for cash specifically.

If it's genuinely cheaper for a business to accept direct deposit/bank transfer, PayID, BPay, cash, etc - why would they not offer a discount for that?

 

[transpactraveller]

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.

Correct, and when they imposed a Sunday surcharge they just made it more expensive on Sunday, they didn't make the prices cheaper on every other day (as was their argument - that without surcharging they had to have a blended higher everyday price, and with surcharging they could make it cheaper during the week and only charge higher prices on Sunday).

 

[TheCollecter]

Let's not forget whose idea CC Surcharges were, shall we

Designation of Credit Card Schemes in Australia | Media Releases

Following a decision by the Payments System Board, the Reserve Bank has today brought credit card schemes in Australia under its regulatory oversight

www.rba.gov.au

Quoth the Raven: ‘Nevermore’

 

[esseeeayeenn]

By the way, I want to change my vote from "unsure" to "not happy".

 

[esseeeayeenn]

My QF membership year ends tomorrow.
I'm not expecting to earn any more QF points overnight.

This year, I earned 244.754 QF points from credit cards, 174, 238 from other categories, including 67,900 from flights.
A total of 418,992 of which 58% came from credit cards.

Last year, I earned 186,951 QF points from credit cards, 194,666 from other categories including 82,475 from flights.
A total of 381,617 of which 49% came from credit cards.

I would expect the changes which come into effect from the day after tomorrow will greatly impact the rate at which people earn points, and their future points balances. This will mean QF loyalty representing a progressively lower contingent liability for QF, as our points balances are eroded.

In an ideal or even a fair world, a reduction in supply would mean the value of QF points would increase and the cost in points of reward flights and other things would fall. However in the real world, I am confident there will be more enhancements to come.

 

[tao_au]

Agree