Latest news with #surcharge
News24
a day ago
- Business
- News24
Temporary surcharge suspension applies across Ekurhuleni, not just Thembisa
Tebogo Letsie The mayor has suspended the electricity surcharge following protests and backlash in Thembisa. The residents decry the high costs and lack of proper community engagement. The city is to review affordability measures, cost recovery and fairness. Ekurhuleni Mayor Nkosindiphile Xhakaza has announced the temporary suspension of a fixed R126 electricity charge following violent protests in Thembisa on Monday. The decision comes after residents expressed outrage over increased costs, which they say were introduced without proper consultation. Xhakaza confirmed that the suspension applied across the city, not just in Thembisa, and was intended to open space for further dialogue with communities. 'This is not a permanent scrapping,' Xhakaza said. We are creating a platform for engagement and to re-examine how the tariff structure affects those who are poor but do not qualify as indigent. Nkosindiphile Xhakaza The mayor acknowledged that the fixed charge, introduced earlier this year as part of the municipality's new tariff structure, had a real impact on household budgets already strained by the rising cost of living. The charge was meant to help Ekurhuleni recover costs and reinvest in infrastructure, but the backlash had shown that the process needed re-evaluation. Xhakaza admitted that although the city had conducted public consultations through Integrated Development Plan (IDP) meetings from April to May, the protests highlighted a disconnection between formal processes and public sentiment. 'We held the IDP meetings and budget address on 29 May. The new tariffs came into effect on 1 July, and there was an outcry,' he said. He added that petitions had started flowing in through ward councillors and that a meeting scheduled for Sunday had failed to defuse the tension. 'We underestimated the level of mobilisation and frustration, which unfortunately escalated into violence. We have to be sensitive to that.' A resident from Thembisa, who spoke during the protests, expressed deep frustration over the additional costs: 'The worst scenario is you buy R1 000 worth of electricity and Ekurhuleni takes R250 off the top. That's before VAT and other deductions. We weren't even consulted. It's not fair; we're paying for tests that aren't our concern.' The resident said the surcharge had been in effect for nearly two months and that many people in the township were already struggling to make ends meet. We asked why this was happening and didn't get a straight answer. Xhakaza acknowledged the concerns raised and said the city would look into broader affordability measures, including refining how indigent households were classified and supported. 'We must ask: How do we better structure the tariffs so that we are not punishing those who are just above the threshold but still poor?' He said any revised model would consider usage levels, business needs and infrastructure recovery, but would be informed by public input. 'We need a balanced model that is transparent and fair. We're not disputing the need for tariff income, but how we collect it matters.'
The Australian
15-07-2025
- Business
- The Australian
RBA proposes removing surcharge fees costing Aussies $1.2bn
Australian consumers could stop paying a sneaky surcharge fee that costs us $1.2bn a year after a Reserve Bank of Australia proposal. The RBA proposes the removal of surcharge fees for tapping a card on eftpos, MasterCard and Visa, in a fresh consultation paper. While this is a step further than the government's proposed ban on fees for debit transactions, the RBA said it would bring the Australian payment market in line with the rest of the world. The central bank is looking to finalise consultation with industry by the end of the year and have surcharges removed by next July. RBA governor Michele Bullock said the payment landscape was always evolving, meaning it was critically important to keep pace and ensure Australia remained safe, competitive, and efficient. RBA governor Michele Bullock said it was critically important for Australia's payment market to remain competitive. Picture: Christian Gilles / NewsWire 'We think the time has come to address some of these high costs and inefficiencies in the system,' Ms Bullock said. 'This could save consumers $1.2bn annually, simplify payments and boost competition.' Despite flagging savings, the RBA consultation papers show if businesses raise prices to compensate for the removal of surcharges it will add 0.1 per cent to inflation. 'Merchants that surcharge debit card payments would be faced with a choice of increasing their prices or absorbing their debit payment costs through reduced margins,' the RBA said. The Independent Payment Forum says the RBA's announcement will do little to decrease the $6.4bn in card fees levied on consumer and businesses. IPF co-founder Bradford Kelly said these costs were ultimately borne by consumers. 'Today small business pays the lion's share of more than $6.4bn in processing fees charged by banks, PSPs (payment service providers) and card schemes and this will not change under the RBA's proposals,' Mr Kelly said. 'The proposed regulatory options fail small businesses and the local communities they serve. Rather, they benefit big business, big banks and big offshore companies.' Mr Kelly said a proposed ban on surcharging would expose many thousands more small businesses to these fees levied by banks, PSPs and card schemes, leading to reduced ability to compete with big business, potential job losses and higher prices for all consumers, including those who use cash. 'Without fundamental reform and more legislative intervention, these unfair and inflated fees will continue to decimate small business profit margins, increase prices, reduce productivity and possibly lead to closures,' he said. The profit margins cafes would get if they absorbed card charges. Picture: Supplied Australian Payments Plus chief payments and schemes officer Adrian Lovney welcomed the RBA's call for a fit-for-purpose payments network. 'The proposed changes will simplify the payment experience for customers and bring consistency across the industry,' Mr Lovney said. 'But it also means merchants will need to absorb these costs, making efficient payment routing and competitive and transparent pricing more important than ever. 'The RBA has acknowledged any savings for customers would require businesses to absorb the costs.' The surcharge fees are costing Aussies $1.2bn. Picture: NewsWire / Nicholas Eagar The central bank is proposing another two changes to Australia's card network, including lowering the cap on interchange fees in a move it says could save businesses $1.2bn a year. 'Around 90 per cent of Australian businesses are estimated to be better off under the proposed change,' the RBA said. 'The proposed reduction in interchange caps would benefit small businesses the most, as they tend to pay fees closer to the existing cap.' The RBA is also in consultation to require card networks and large acquirers to publish the fees they charge. 'Improving transparency and competition will help all players better under the fees they are charged and make it easier for businesses to shop around for a better deal,' the RBA said. Federal Treasurer Jim Chalmers said the decline in cash use and the rise of electronic payments meant more Aussies were getting slugged for using their own money. 'The payments system is complex and the RBA's review and consultation paper is an important step to reduce costs for consumers while managing the impact on small businesses and the broader economy,' he said. 'The RBA expects to be able to implement these changes under its own powers, subject to the outcomes of its consultation. 'We take the RBA's views seriously and will consider their recommendations along with broader industry feedback.'
ABC News
15-07-2025
- Business
- ABC News
RBA looks to scrap card surcharges
The Reserve Bank wants to ban businesses from adding a surcharge to credit and debit card transactions in a move which could save consumers $1.2 billion a year. But small businesses and business groups are wary. They say banning surcharges will mean costs will be paid in other, perhaps hidden, ways.
SBS Australia
15-07-2025
- Business
- SBS Australia
RBA wants to scrap surcharge fees, says consumers would save $1.2 billion
Australia's central bank wants to remove surcharge fees on both debit and credit cards in a move it expects would save consumers more than $1 billion each year. The Reserve Bank of Australia's (RBA) review of merchant card payment costs recommends the fees be scrapped on EFTPOS, Mastercard and Visa card transactions as they don't help consumers make more efficient payment choices. Lowering the cap on interchange fees paid by businesses — another recommendation of the review — as well would save Australians $1.2 billion. An interchange fee is paid by a business to a customer's card issuer when a transaction occurs. Treasurer Jim Chalmers had said the government was prepared to ban fees on debit card transactions from the start of 2026, but the RBA has included credit cards. Consumers are estimated to pay $1.2 billion in surcharges on payments each year, the equivalent of $60 per card-using adult. Scrapping surcharges would also mean consumers don't need to switch between payment methods to try and avoid a fee, the report stated. RBA governor Michele Bullock said both consumers and businesses benefited from the proposal as fewer Australians make cash payments. Customers would avoid paying surcharges, while businesses would no longer be forced to face high costs of accepting card payments. "We think the time has come to address some of these high costs and inefficiencies in the system," Bullock said. "The payments landscape is always evolving, and it's critically important that we keep pace to ensure it remains safe, competitive and efficient." The RBA proposed removing its own prohibition on "no-surcharge" rules to achieve the scrapping of the fees. The bank expected the card networks would then follow by implementing "no-surcharge" rules based on historical experience and arrangements in other jurisdictions. If that did not occur, the RBA would recommend the federal government legislate to ban surcharge fees. Lowering the cap on interchange fees by businesses is predicted to benefit small businesses the most, because they often pay higher fees. The central bank found small businesses would be $185 million better off under the changes, with 90 per cent of them benefiting. Better transparency achieved by forcing card networks and large acquirers to publish their charging fees has also been recommended, in a bid for better competition between the networks. Bullock predicted the proposals would spark much discussion, particularly among businesses that do surcharge, prompting a six-week consultation period on their plan. Any changes won't kick in until July 2026.
Daily Mail
14-07-2025
- Business
- Daily Mail
RBA proposes ban on card surcharging
Australia's central bank wants to remove surcharge fees on both debit and credit cards in a move it expects would save consumer more than $1 billion. The Reserve Bank of Australia's review of merchant card payment costs recommends the fees be scrapped on EFTPOS, Mastercard and Visa card transactions as they don't help consumers make more efficient payment choices. Lowering the cap on interchange fees paid by businesses - another recommendation of the paper - as well would save Australian $1.2 billion. An interchange fee is paid by a business to a customer's card issuer when a transaction occurs. The bank's proposals go further than what the federal government has previously suggested. Treasurer Jim Chalmers had said the government was prepared to ban fees on debit card transactions from the start of 2026, but the RBA has included credit cards. Consumers are estimated to pay $1.2 billion in surcharges on payments each year, the equivalent of $60 per card-using adult. Scrapping surcharges would also mean consumers don't need to switch between payment methods to try and avoid a fee, the report stated. RBA Governor Michele Bullock said both consumers and businesses benefited from the proposal as fewer Australians make cash payments. Customers would avoid paying surcharges, while businesses would no longer be forced to face high costs of accepting card payments. 'We think the time has come to address some of these high costs and inefficiencies in the system,' she said. 'The payments landscape is always evolving, and it's critically important that we keep pace to ensure it remains safe, competitive and efficient.' The RBA proposed removing its own prohibition on 'no-surcharge' rules to achieve scrapping the fees. It expected the card networks would then follow by implementing 'no-surcharge' rules based on historical experience and arrangements in other jurisdictions. If that did not occur, the RBA would recommend the federal government legislate to ban surcharge fees. Lowering the cap on interchange fees by businesses is predicted to benefit small businesses the most, because they often pay higher fees. The central bank found small businesses would be $185 million better off under the changes, with 90 per cent of them benefiting. Better transparency achieved by forcing card networks and large acquirers to publish what fees they are charging has also been recommended, in a bid for better competition between the networks. Ms Bullock predicted the proposals would spark much discussion particularly among businesses that do surcharge, prompting a six-week consultation period on their plan. Any changes won't kick in until July 2026.
