RBA Surcharges hope that it is banned altogether

[marki]

Commonwealth Bank has urged the Reserve Bank to outlaw the practice as part of the RBA’s review of Australia’s payments framework to ensure the system is fit for purpose. The Labor government wants to ban surcharges on debit card purchases ahead of a federal election where cost-of-living pressures are top of voters’ minds.

• Current Sentiment: There have been calls from some quarters, including posts on X, suggesting that the RBA should ban all debit surcharges, viewing them as an unfair cost passed onto consumers. However, this is yet to translate into policy change, as the RBA maintains its current framework on card surcharges.
  https://x.com/gerardmmkl/status/1880226637285060723

In summary, the RBA allows debit card surcharges but with strict guidelines to ensure they reflect actual costs, aiming to balance consumer protection with the realities of business expenses.

Major banks split on surcharge overhaul as complaints surge

There is no consensus over the way forward for Australia’s controversial system of charging extra for card payments.

www.afr.com

 

[moa999]

Don't disagree that lowest cost routing rules should apply which would push Visa and MC Debit cards via cheaper routes.

But equally we all need to understand that this probably means the blended (where applicable) surcharge for credit cards probably increases under the current rules.

In the last few months I have seen more businesses applying higher surcharges for Amex Vs Visa/ MC

 

[marki]

Qantas, Virgin warn of higher prices if card surcharges banned — The Sydney Morning Herald

The airline duopoly has defended card surcharges, saying they give customers choice and keep prices low.

stocks.apple.com

Qantas and Virgin warn of higher prices if card surcharges are banned.
The airline duopoly has defended card surcharges, saying they give customers a choice and keep prices low.
Australia’s major airlines have defended credit card surcharges and warned prices could rise if the controversial card fees are scrapped after the nation’s biggest bank called for an end to the practice.
The warnings from Qantas and Virgin Australia published on Friday come as the Reserve Bank considers whether to tell the government to ban surcharges or push for other changes to the fees, which have become more contentious as the number of Australians using cash falls.

I am missing something here. I thought it would be cheaper for us, but apparently not. Go figure.

 

[gfm]

The price shown on the item/menu should be the price you pay. No add-on's/surcharges. Similarly, if a restaurant wants to charge more on a public holiday, it should provide a public holiday menu with the correct (inflated) price. Simple.

 

[levelnine]

I am missing something here. I thought it would be cheaper for us, but apparently not. Go figure.

They're attempting to argue that up is down and left is right.

The actual reason is their loyalty business model is in big trouble if surcharges are banned.

 

[Doctore1003]

Let’s be honest. We (AFFers) want the general public to bear the cost of card acceptance because it means they are subsidising our (superior) points earn.

 

[RealtimeY]

The airlines method of surcharging is pretty fair. With the exception of Rex which requires you to visit an airport sales desk to pay, the major airlines do actually provide convenient ways of paying the advertised price without any surcharge. If someone wants credit card points on top of it, it’s only fair that they pay a surcharge.

 

[moa999]

am missing something here. I thought it would be cheaper for us, but apparently not. Go figure.

Credit card holders are currently advantaged by a blended rate.
If you stripped out people actually using debit cards, then that blended rate would increase.
(My understanding is some contracts have different rates depending on card type - basic, gold, platinum, and sometimes different fees for foreign issued cards)

 

[RealtimeY]

From the article it sounds like banning surcharging of debit cards would ultimately mean that the banks would need to unwind or at least adjust those blended rate plans as it wouldn’t make sense for a business to choose any more.

I think marki is referring to the call that surcharges should be banned altogether which is a different matter.

 

[p--and--t]

I think marki is referring to the call that surcharges should be banned altogether which is a different matter.

Yes. Two different discussions getting a bit confused

1. Should people be charged a surcharge to access their own money in a savings account in lieu of cash (which saves the bank’s & retailer’s high costs of handling cash)

2. Should people be charged to borrow others peoples money (short or long term) and get credited loyalty points in the process.

 

[gfm]

I think there is another element:
3. Should people actually be charged a different amount than that which appears on the price-tag or the price quote for an item. (That ALL of the costs of business - banking fees, electricity, labour, GST should be taken into consideration into pricing the item in the first place without the need for "surcharges")

 

[Doctore1003]

I think there is another element:
3. Should people actually be charged a different amount than that which appears on the price-tag or the price quote for an item. (That ALL of the costs of business - banking fees, electricity, labour, GST should be taken into consideration into pricing the item in the first place without the need for "surcharges")

This is already the law. Businesses can’t impose a card surcharge if they only accept card payments, because in effect that means they lied on the price tag. Surcharges are only permitted where customers can choose to pay in cash but don’t.

 

[Quickstatus]

I don't know why there are surcharges. Our offices have lower costs as we don't have to handle cash

 

[oz_mark]

I think there is another element:
3. Should people actually be charged a different amount than that which appears on the price-tag or the price quote for an item. (That ALL of the costs of business - banking fees, electricity, labour, GST should be taken into consideration into pricing the item in the first place without the need for "surcharges")

The quoted prices need to include everything that is ascertainable when it is quoted.

I don't know why there are surcharges. Our offices have lower costs as we don't have to handle cash

Because it is a way of increasing prices without increasing prices.

 

[gfm]

The quoted prices need to include everything that is ascertainable when it is quoted.

Because it is a way of increasing prices without increasing prices.

And a very sneaky way of increasing prices, when it is not on the price tag!

 

[elanshin]

I don't know why there are surcharges. Our offices have lower costs as we don't have to handle cash

Because its very simple to say and prove "hey our merchant charge us 1.15% to use card so if you want to here's the cost". Its much harder to say " it costs us 2 people x amount of hours per day to do all the cash handling resulting in a cost of $xx_xx that is 2% or our revenue".

But there is another discussion to be had (and its being had globally) about the cost rhat Visa, MC are charging and gouging everyone involved for using their network and whether that should be restricted. Or that it should be the banks that bear that cost with their record profits and not the merchants.

 

[WeeGraeme]

I surcharges are banned, then the price will go up to the equivalent of the highest cost of payment for everyone.

 

[gfm]

But many merchants just add a surchage without advertising it clearly and then place a terminal in front of one without the ability of the customer to see the full amount. Or on a website just as you are about to pay. That is why I think it is sneaky! Or else they give they give info just as you are on a screen that is the payment screen.
Surely that is unAustralian. And maybe tourists might think so too!

 

[gfm]

But many merchants just add a surchage without advertising it clearly and then place a terminal in front of one without the ability of the customer to see the full amount. Or on a website just as you are about to pay. That is why I think it is sneaky! Or else they give they give info just as you are on a screen that is the payment screen.
Surely that is unAustralian. And maybe tourists might think so too!

I dont think we want to be like the Americans when there is a price + state tax + city tax added on when there is a purchase!

 

[Freq Flier 2013]

When the surcharges came in all the banks introduced diamond, platinum ect cards to justify higher merchant fees. Logic was they could charge higher fees and the business didn’t care as it would be passed on to the customer.
Also remember that the rate charged by the business doesn’t have to be the exact rate they are charged by the bank - terminal rental fee and ..

Additional costs​

There may be some additional costs that don’t appear on these statements which businesses may include in their surcharges.

These include costs paid to providers other than their bank or payment facilitator, such as gateway fees, terminal fees, fraud prevention costs and costs of specific types of insurance. Businesses need to calculate these costs themselves.

So a direct merchant fee of 1.45% (square) can end up being 1.7% to the end user.