Reserve Bank of Australia calls for end to debit, credit card surcharges costing Aussie shoppers $1.2 billion annually
The central bank on Tuesday revealed a three-tiered approach to tackling niggly debit and credit card surcharges that ping consumers.
Alongside demanding an end to surcharging, the RBA also called for the cap on interchange fees, which are paid by businesses to shoppers' banks, and demanded greater transparency around these fees.
The latter, the RBA said, will make it easier for businesses to shop around for better-value payment deals.
Removing interchange fees could save businesses $1.2b annually and about 90 per cent of local businesses are estimated to be better off under the central bank's proposal, according to the RBA.
It would 'benefit small businesses the most' as they generally pay higher interchange fees.
The RBA's call, however, was met with backlash from the Australian Restaurant & Cafe Association (ARCA) which labelled it a 'short-sighted, anti-small business policy' and argued it would force establishments to pass costs onto consumers.
'Who the hell does the RBA think will bear the cost of this ridiculous decision?' ARCA chief executive Wes Lambert said.
'First, merchants — and then customers, through higher menu prices in the middle of a cost of living crisis.
'No matter how low merchant fees go based on the RBA's intention to save businesses $1.2 billion dollars, with no surcharging, businesses who previously paid net $0 in merchant fees, will now be faced with the bill.'
Similarly, the Council of Small Business Organisations Australia said the proposal was a 'mixed bag' as it welcomed reforms to transparency and fee reductions but warned there were 'serious unintended consequences by eliminating the right to surcharge'.
'Removing surcharges doesn't remove all the cost, it simply hides it,' COSBOA chair Matthew Addison said.
'For small businesses already managing tight margins, this means those costs would have to be absorbed into base prices, making it harder for businesses to be transparent and for consumers to make informed choices.'
Australian Payments Plus, which covers BPAY and eftpos in Australia, said it welcomed the RBA's submission and stressed a surcharge bank will 'simplify the payment experience for customers and bring consistency across the industry'.
'It also means merchants will need to absorb these costs, making efficient payment routing and competitive and transparent pricing more important than ever,' Australian Payments Plus chief payments and schemes officer Adrian Lovney said.
The RBA will continue to seek feedback on the changes until late August before handing down a final proposal at the end of the year.
Changes will be introduced from the beginning of next year and enforced from July 1.
Major Australian banks and the Australian Banking Association have called for interchange fees not to be lowered as they help counteract fraud and cover chargeback rights – which allows banks to reverse certain payments.
It comes as Treasurer Jim Chalmers last year vowed to ban debit card surcharges to ease cost of living pressures, but does not extend to credit card purchases.
'This is all about getting a better deal for consumers, reducing costs for small businesses and promoting a more competitive payments system,' Mr Chalmers said in October.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
West Australian
31 minutes ago
- West Australian
Australian news and politics live: Albanese to visit Great Wall of China, signs trade agreements
Scroll down for the latest news and updates. Elbridge Colby, the man reviewing AUKUS inside the Pentagon, thinks he can replicate MAGA's success in scolding, berating and bullying Europe into lifting defence spending in Australia and the Indo-Pacific. But his cut-and-paste approach may not only fail, but backfire. This is because his hectoring approach fails to recalibrate for the important ways that Europe differs from Asia. Mr Colby's demands that Indo-Pacific allies raise defence spending are legitimate in Australia's case. But he is far from the first person to raise the issue. Read more. Today marks a historic highlight in Prime Minister Anthony Albanese's visit to China, with a walk along the Great Wall planned before he heads to Chengdu. This follows a landmark series of meetings in Beijing's Great Hall with President Xi Jinping, Chairman Zhao Leji, and Premier Li Qiang, where Albanese emphasised Australia's ongoing commitment to engaging China in areas of mutual benefit, while not shying away from disagreement when needed. The diplomatic talks have already yielded tangible results for both nations. On Tuesday, six new agreements were signed, including one that will soon see sweet, tangy Chinese jujubes available on Australian shelves—while, for the first time, apples from mainland Australia will be exported to China. 'In recent years, co-operation has encountered headwinds,' Chinese Premier Li admitted as the two countries move to deepen trade cooperation amid broader global uncertainty. Albanese echoed these sentiments, stating, 'My government believes unequivocally in free and fair trade as a driver of global growth, and I know the discussions that we've had today have been very constructive'.
West Australian
an hour ago
- West Australian
LATIKA BOURKE: Pentagon's MAGA-style push on AUKUS and defence spending may backfire in Indo-Pacific
Elbridge Colby, the man reviewing AUKUS inside the Pentagon, thinks he can replicate MAGA's success in scolding, berating and bullying Europe into lifting defence spending in Australia and the Indo-Pacific. But his cut-and-paste approach may not only fail, but backfire. This is because his hectoring approach fails to recalibrate for the important ways that Europe differs from Asia. Mr Colby's demands that Indo-Pacific allies raise defence spending are legitimate in Australia's case. But he is far from the first person to raise the issue. Well before US President Donald Trump appointed Mr Colby Under Secretary of Defence, the Australian authors of the 2023 Defence Strategic Review, Peter Dean and Angus Houston, the former Chief of the Australian Defence Force, were urging an increase in spending from around 2 per cent of GDP to 3 per cent. Kim Beazley, former Labor Leader, defence minister and ambassador to the United States, preceded them both. And it is the same plea made by Mike Pezzullo, the former Home Affairs boss who authored the 2009 Defence White Paper for the Rudd Government, the last time Labor was in power. Prime Minister Anthony Albanese should raise defence spending and match it to the capabilities that the defence review, which he commissioned, said Australia needed. Should the region become even more dangerous, he will not be remembered for his 94-seat landslide but as the Labor prime minister who ignored every siren call and left the country, negligently and dangerously unprepared. While he should not need to be bullied into doing so by the United States, it is also unwise for MAGA to be pushing the issue as hard as it is and so publicly and not leaving more of the heavy lifting to Australian voices. Mr Colby said in a social media post on Tuesday that: 'Europe's progress over the last few months is showing the wisdom of President Trump's approach.' 'We are actively applying his successful approach to enable our allies around the world to step up efforts for the common defence.' Earlier this week he said urging allies to step up their defence spending was a 'hallmark' of President Trump's strategy in Asia as in Europe, 'where it has already been tremendously successful.' 'Of course, some among our allies might not welcome frank conversations,' he said. 'But many, now led by NATO after the historic Hague Summit, are seeing the urgent need to step up and are doing so. 'President Trump has shown the approach and the formula - and we will not be deterred from advancing his agenda.' But there are good reasons for MAGA to pause, reconsider and recalibrate. Their methods might have worked at NATO, when member states agreed to lift their spending to 3.5 per cent next decade, but this is no guarantee of their success in Australia's neck of the woods. Firstly, the Indo-Pacific is not at war. Europe is. It is a statement of the obvious that being caught unprepared to deal with a nuclear-armed imperialist on your border who has rolled tanks inside the borders of an innocent country would inspire a sense of urgency, if not panic. It is true, as NATO Secretary General Mark Rutte has said, that US President Donald Trump's methods, including threatening the very concept of the defensive alliance, were also decisive in changing European minds about the need to start to put their shoulder to the wheel. But this is the point. Taking Europe to the edge of the cliff and forcing them to look over the edge and contemplate a world without the United States' security blanket works because of NATO and Article 5. Article 5 is the clause that states an attack on any member state shall be considered an attack on all. It is this clause that allowed Europe to freeload off the United States under more benevolent Presidents for so long. And it is why the US and MAGA's complaints about Europe spending big on its social welfare while expecting the US to pay its security bills was so legitimate. As Vladimir Putin demonstrated, Europe had a menacing bear on its border and remains in a position where it cannot subdue the beast on its own. But these dynamics do not exist for Australia and the wider Indo-Pacific. While it is accepted that China seeks dominance of the region and control of shipping routes, war is neither current nor inevitable. While China's President Xi Jinping has said he wants his military to be ready to take Taiwan by 2027 and, with force if necessary, there are many ways he can subdue the democratic island without an invasion. At one end, this could include a blockade that may or may not be seen as an act of war by the United States. Another more worrying tactic could be China declaring a 'quarantine' of Taiwan, and claiming it is an internal matter, making it even more difficult to define whether it constituted an act of war or not. This is why expecting countries like Australia to start declaring in 2025 that they will take part in a hypothetical war with submarines we will not possess until the early 2030s, in a best-case scenario, is dangerously reductive, as it misses a vital opportunity to talk about how to push back on China's already coercive and menacing behaviour towards Taiwan, and the Philippines. The other, and perhaps most powerful element MAGA misses when it comes to the Indo-Pacific is the one of choice. Australia has a choice about how it wants to respond to the great power competition underway between the United States and China. And so far, MAGA's methods are only moving Anthony Albanese one way – in China's direction. Australians fundamentally don't like Donald Trump, but still believe in and back the alliance. However, it would be hazardous to assume these attitudes are fixed. Australia's population is increasingly migrant-based, as Mr Albanese's appeals to Indian and Chinese voters at the last election and throughout his first term underlined. It should not be assumed that this voting bloc will always have an enduring loyalty and affection to the United States. And MAGA's behaviour to date could easily provoke questions about whether the United States would have Australia's back as per our treaty alliance. All this said, it is extremely likely that were the United States to fight China in the foreseeable future, Australia would take part. Our joint intelligence facility with the US at Pine Gap, as well as the US bases on Australian soil, would make us a target at any rate and all but guarantee our involvement. There is a fundamental inconsistency, if not incoherence, to the premise of the Financial Times report that Mr Colby is demanding allies, including Australia, state whether they would fight over Taiwan, when Mr Trump – wisely — himself refuses to say, strategic ambiguity carries a deterrent effect of its own. But perhaps the greatest question, that MAGA's methods will only justify if it continues to self-righteously and sanctimoniously badger its Indo-Pacific allies, is what values and order would we be fighting for? As Richard Spencer, the former US Navy Secretary who war-gamed these scenarios, recently said, such a war would 'not pretty at all, for either side' ie. it would result in the deaths of thousands of lives. The resolve of the United States and its allies must be to avoid this at all costs. But if Xi were to make such a catastrophic mistake, like his authoritarian collaborator Mr Putin, then Australians would naturally ask, what would we be fighting for? And this is where the MAGA approach could backfire. Because the Trump Administration looks more focused on shoring up American dominance rather than a global order that protects its smaller friends. How else to read the symbolism of his first tariff-imposition letters going to Indo-Pacific allies South Korea and Japan? On top of the tariffs on Australian steel and exports, is now the threat of 200 per cent duties on pharmaceuticals. This is despite Australia and the United States having a free trade agreement. Australia is no stranger to economic coercion. It experienced the Chinese Communist Party's wrath after the pandemic when Beijing effectively killed Australian wine, lobster and barley imports overnight because the Coalition asked for an inquiry into COVID. But unwarranted duties from a treaty ally, that, at the same time has injected uncertainty into the AUKUS deal are such difficult pills to swallow, precisely because of the 'friend' who is administering them. It may well be that if faced with the poisons of a bullying, authoritarian China and a free but selfish, 'America First' mercurial United States, Australians would still prefer the latter. Our joint intelligence facility with the US at Pine Gap, as well as the US military presence on Australian soil, would highly likely make us a target and force our involvement at any rate. But Mr Colby and his MAGA friends should realise that there is a range of tactics that can engineer success, and a one-size-fits-all bully boy model may prove ultimately nihilistic.
Perth Now
an hour ago
- Perth Now
Pentagon AUKUS pressure risks backfiring in Australia
Elbridge Colby, the man reviewing AUKUS inside the Pentagon, thinks he can replicate MAGA's success in scolding, berating and bullying Europe into lifting defence spending in Australia and the Indo-Pacific. But his cut-and-paste approach may not only fail, but backfire. This is because his hectoring approach fails to recalibrate for the important ways that Europe differs from Asia. Mr Colby's demands that Indo-Pacific allies raise defence spending are legitimate in Australia's case. But he is far from the first person to raise the issue. Well before US President Donald Trump appointed Mr Colby Under Secretary of Defence, the Australian authors of the 2023 Defence Strategic Review, Peter Dean and Angus Houston, the former Chief of the Australian Defence Force, were urging an increase in spending from around 2 per cent of GDP to 3 per cent. Kim Beazley, former Labor Leader, defence minister and ambassador to the United States, preceded them both. And it is the same plea made by Mike Pezzullo, the former Home Affairs boss who authored the 2009 Defence White Paper for the Rudd Government, the last time Labor was in power. Prime Minister Anthony Albanese should raise defence spending and match it to the capabilities that the defence review, which he commissioned, said Australia needed. Should the region become even more dangerous, he will not be remembered for his 94-seat landslide but as the Labor prime minister who ignored every siren call and left the country, negligently and dangerously unprepared. While he should not need to be bullied into doing so by the United States, it is also unwise for MAGA to be pushing the issue as hard as it is and so publicly and not leaving more of the heavy lifting to Australian voices. Mr Colby said in a social media post on Tuesday that: 'Europe's progress over the last few months is showing the wisdom of President Trump's approach.' 'We are actively applying his successful approach to enable our allies around the world to step up efforts for the common defence.' Earlier this week he said urging allies to step up their defence spending was a 'hallmark' of President Trump's strategy in Asia as in Europe, 'where it has already been tremendously successful.' 'Of course, some among our allies might not welcome frank conversations,' he said. 'But many, now led by NATO after the historic Hague Summit, are seeing the urgent need to step up and are doing so. 'President Trump has shown the approach and the formula - and we will not be deterred from advancing his agenda.' But there are good reasons for MAGA to pause, reconsider and recalibrate. Their methods might have worked at NATO, when member states agreed to lift their spending to 3.5 per cent next decade, but this is no guarantee of their success in Australia's neck of the woods. Firstly, the Indo-Pacific is not at war. Europe is. It is a statement of the obvious that being caught unprepared to deal with a nuclear-armed imperialist on your border who has rolled tanks inside the borders of an innocent country would inspire a sense of urgency, if not panic. It is true, as NATO Secretary General Mark Rutte has said, that US President Donald Trump's methods, including threatening the very concept of the defensive alliance, were also decisive in changing European minds about the need to start to put their shoulder to the wheel. But this is the point. Taking Europe to the edge of the cliff and forcing them to look over the edge and contemplate a world without the United States' security blanket works because of NATO and Article 5. Article 5 is the clause that states an attack on any member state shall be considered an attack on all. It is this clause that allowed Europe to freeload off the United States under more benevolent Presidents for so long. And it is why the US and MAGA's complaints about Europe spending big on its social welfare while expecting the US to pay its security bills was so legitimate. As Vladimir Putin demonstrated, Europe had a menacing bear on its border and remains in a position where it cannot subdue the beast on its own. But these dynamics do not exist for Australia and the wider Indo-Pacific. While it is accepted that China seeks dominance of the region and control of shipping routes, war is neither current nor inevitable. While China's President Xi Jinping has said he wants his military to be ready to take Taiwan by 2027 and, with force if necessary, there are many ways he can subdue the democratic island without an invasion. At one end, this could include a blockade that may or may not be seen as an act of war by the United States. Another more worrying tactic could be China declaring a 'quarantine' of Taiwan, and claiming it is an internal matter, making it even more difficult to define whether it constituted an act of war or not. This is why expecting countries like Australia to start declaring in 2025 that they will take part in a hypothetical war with submarines we will not possess until the early 2030s, in a best-case scenario, is dangerously reductive, as it misses a vital opportunity to talk about how to push back on China's already coercive and menacing behaviour towards Taiwan, and the Philippines. The other, and perhaps most powerful element MAGA misses when it comes to the Indo-Pacific is the one of choice. Australia has a choice about how it wants to respond to the great power competition underway between the United States and China. And so far, MAGA's methods are only moving Anthony Albanese one way – in China's direction. Australians fundamentally don't like Donald Trump, but still believe in and back the alliance. However, it would be hazardous to assume these attitudes are fixed. Australia's population is increasingly migrant-based, as Mr Albanese's appeals to Indian and Chinese voters at the last election and throughout his first term underlined. It should not be assumed that this voting bloc will always have an enduring loyalty and affection to the United States. And MAGA's behaviour to date could easily provoke questions about whether the United States would have Australia's back as per our treaty alliance. All this said, it is extremely likely that were the United States to fight China in the foreseeable future, Australia would take part. Our joint intelligence facility with the US at Pine Gap, as well as the US bases on Australian soil, would make us a target at any rate and all but guarantee our involvement. There is a fundamental inconsistency, if not incoherence, to the premise of the Financial Times report that Mr Colby is demanding allies, including Australia, state whether they would fight over Taiwan, when Mr Trump – wisely — himself refuses to say, strategic ambiguity carries a deterrent effect of its own. But perhaps the greatest question, that MAGA's methods will only justify if it continues to self-righteously and sanctimoniously badger its Indo-Pacific allies, is what values and order would we be fighting for? As Richard Spencer, the former US Navy Secretary who war-gamed these scenarios, recently said, such a war would 'not pretty at all, for either side' ie. it would result in the deaths of thousands of lives. The resolve of the United States and its allies must be to avoid this at all costs. But if Xi were to make such a catastrophic mistake, like his authoritarian collaborator Mr Putin, then Australians would naturally ask, what would we be fighting for? And this is where the MAGA approach could backfire. Because the Trump Administration looks more focused on shoring up American dominance rather than a global order that protects its smaller friends. How else to read the symbolism of his first tariff-imposition letters going to Indo-Pacific allies South Korea and Japan? On top of the tariffs on Australian steel and exports, is now the threat of 200 per cent duties on pharmaceuticals. This is despite Australia and the United States having a free trade agreement. Australia is no stranger to economic coercion. It experienced the Chinese Communist Party's wrath after the pandemic when Beijing effectively killed Australian wine, lobster and barley imports overnight because the Coalition asked for an inquiry into COVID. But unwarranted duties from a treaty ally, that, at the same time has injected uncertainty into the AUKUS deal are such difficult pills to swallow, precisely because of the 'friend' who is administering them. It may well be that if faced with the poisons of a bullying, authoritarian China and a free but selfish, 'America First' mercurial United States, Australians would still prefer the latter. Our joint intelligence facility with the US at Pine Gap, as well as the US military presence on Australian soil, would highly likely make us a target and force our involvement at any rate. But Mr Colby and his MAGA friends should realise that there is a range of tactics that can engineer success, and a one-size-fits-all bully boy model may prove ultimately nihilistic.
