The RBA has issued a recommendation to stop surcharging on Eftpos, Mastercard, and Visa transactions.
“Consumers currently pay around $1.2 billion in card surcharges each year,” the bank said in a release.
“Surcharging is no longer serving its original purpose of guiding consumers towards more efficient payment methods: avoiding these fees has become more difficult as cash use has declined, businesses often apply the same surcharge rates to debit and credit cards, and there are significant challenges in enforcing the present surcharging regulations.
“Removing surcharging would make card payments simpler, more transparent and help to increase competition in the card payments system.”
The suggestion to halt surcharges was among several proposals put forward in a consultation paper as part of the RBA’s review of costs associated with merchant card payments and surcharging.
Another was to require card networks and large acquirers to publish the fees they charge.
“Improving transparency and competition will help all players better understand the fees they are charged and make it easier for businesses to shop around for a better deal,” the release said.
The RBA also called for a lower cap on interchange fees paid by businesses, which could save another $1.2 billion a year.
“Around 90 per cent of Australian businesses are estimated to be better off under the proposed policies,” the release said.
“The proposed reductions to interchange caps would benefit small businesses the most, as they tend to pay fees closer to the existing caps. Introducing caps on foreign interchange fees would help to lower fees for all businesses accepting international cards.”
A feedback window on the proposals is open until August 26 this year, before the reforms are finalised.
