The RBA today issued a recommendation to end surcharging on Eftpos, Mastercard, and Visa cards.
“Consumers currently pay around $1.2 billion in card surcharges each year,” the bank said in a release.
“Surcharging is no longer achieving its intended purpose of steering consumers to make more efficient payment choices: avoiding surcharges has become harder as cash usage has declined, businesses are increasingly charging the same surcharge rate across debit and credit and there are significant challenges with enforcing the current surcharging rules.
“Removing surcharging would make card payments simpler, more transparent and help to increase competition in the card payments system.”
The surcharge halt was one of several proposals laid out in a consultation paper as part of the RBA’s review of merchant card payment costs 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.
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