RBA - Review of Retail Payments - 2024 Oct

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Review of Retail Payments Regulation – First Phase
Merchant Card Payment Costs and Surcharging
October 2024

The RBA is seeking views from interested stakeholders on the issues raised in this paper. Written submissions on the issues discussed in Section 2 should be provided by 3 December 2024 to:
[email protected]

These people in RBA are living in la la land. I am sending a submission for sure on this.

Below are some of points mentioned in the PDF, which makes me really angry.

Page 8:

Surcharging can be used by merchants to signal to consumers that they are using a relatively expensive payment method and may encourage them to switch to using lower cost payment methods.

Yes, how did that go? Is everyone paying via the EFTPOS network instead of schemes and AmEx networks now? Are they???

The ability to surcharge places pressure on PSPs and card networks to lower the fees they charge

Yes, at the beginning; but it's worse than before now. About 15 years ago, NAB quoted me 1.5% MSF, but I went with Suncorp and paid 0.8% MSF for credit cards and $0.1 per EFTPOS transactions. These fees are so low, that I simply didn't surcharge my customers, it was just built into the shelf prices of the goods. That was 15 years ago. Now, all the shops are charging 1.5% to 2.5%.

Page 9 :

According to the RBA’s Consumer Payments Survey, in late 2022, 7 per cent of card transactions were surcharged, up from 5 per cent in 2019

Where do these people live? Some parallel universe?

Merchants, especially smaller businesses, are also increasingly taking up single-rate plans that charge the same percentage fee for all card transactions.

What's wrong with this? Like it was 15 years ago, one rate for EFTPOS, one rate for scheme credit, that's it. If you want to pay less surcharge, pay using EFTPOS (insert and PIN), or pay using scheme / AmEx if you want frequent flyer points. Now it's one rate for EFTPOS, one rate for Visa debit, one rate for Visa credit, one rate for MC debit, another for MC credit, another for international scheme. It's turned into a complete mess. You think consumer is going to pay attention when they are paying for their coffee, then decide if they have a MasterCard because MasterCard is cheaper than Visa? FFS.

- Consumers are less able to avoid surcharges
- Consumers dislike surcharges
- Consumers sometimes do not know whether a surcharge will be applied, or how much it will be
- Some merchants may be charging excessive surcharges

Good job RBA, we all saw this coming when you decided to screw this up back in 2003 ......

The RBA’s surcharging regulations allow merchants to surcharge consumers for the reasonable cost of accepting card payments. The RBA’s regulations were introduced in 2003

Debit, credit and charge card transactions are often surcharged at the same rate
It also means that the price signal for consumers to use a lower cost payment method like debit – a key objective of the surcharging framework – is dampened

You, RBA, is a bunch of idiots.

PSPs are increasingly bundling a range of services with their card acceptance services

You have single handedly created a monster, it's called Square - vertical integration hungry beast.

Some of these concerns, particularly around lack of disclosure and excessive surcharging, reflect the difficulty of ensuring compliance with the surcharging rules.

Yeah, why didn't you people think of that? Like did you think back in 2003, that the cops would be roaming around the streets, and checking their EFTPOS statements to see how much is a merchant being charged by their banks?

The RBA is interested in stakeholders’ views on whether there is now a policy case for lowering the interchange benchmarks. Lower interchange fees should feed through to lower card payment costs for merchants and could reduce the incentive for businesses to surcharge card payments. For credit transactions, the weighted-average interchange benchmark (0.5 per cent) and cap on individual fees (0.8 per cent)

This is an example on that there is no cure for stupidity.

They have already set the max interchange fee, yet, consumers are paying higher than ever fees at check out counters. Why are so many shops charging 1.5% or 2% when the fee is 0.8%?

An important question is whether the benefits of LCR are being passed on to merchants.
the RBA is aware of only one PSP offering a dynamic LCR solution – which evaluates and routes each individual transaction to the lowest cost network

So the savings from least cost routing is going into the pockets of the PSP, not the merchants nor the consumers. Good job RBA.

RBA had, overall, made the payment system more complex than 20 years ago, and given more opportunities for merchant to make extra profit. Charging extra after you have been quoted the cost of a product, sounds familar to something, ummm, ah, ACCC calls it "drip pricing". Good job RBA, you have just encouraged everyone to do something illegal.