RBA Surcharge Ban to Save Consumers Billions

OzyBe on 15/07/2025 - 16:41

This has been reported on the news all day today, but detail on how this may work has not really been mentioned.

I know it is just a proposal at this time, but surely for this to make the news there must be a skerik of detail on what may go down?

Some banks have gone on record as supporting these changes - to me, that indicates that the costs are to be borne by the retailer (as banks are not going to support something that reduces their profit, and they make good profit from merchant card services).

I think the savings to consumers will be a big fat zero?

People are phoning into ABC radio to say 'Hooray, no more card surcharges'. Seems like a very simplistic view.

Is it a slow news day, or am I living in some sort of a fairytale universe?

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Comments

  • Gunnar on 15/07/2025 - 16:54
    +12

    Is it a slow news day, or am I living in some sort of a fairytale universe?

    Pretty sure prior to 2003 a merchant had to wear the surcharge costs for card transactions

    • jv on 15/07/2025 - 17:04
      +44

      Pretty sure prior to 2003 a merchant had to wear the surcharge costs for card transactions

      Rubbish… They will just increase their prices…

      It is just another cost they will factor in when setting prices.

      It also means that you could now be paying more than before as profits are often calculated as a % markup of costs…

      • poor_me on 15/07/2025 - 17:14
        +16

        You know they could already be raising prices regardless of surcharges.

        Let them raise prices 10-20% and see how they go.

        • jv on 15/07/2025 - 17:16
          +40

          You know they could already be raising prices regardless of surcharges.

          Your $6 cappuccino with 15cents surcharge will just become a $6.50 cappuccino…

          Consumers will just lose out again..

          • McMaferMur on 15/07/2025 - 17:20
            +10

            @jv: Agree. They will just use this as excuse to raise prices. In fact the retailers will happy to hear this news. Its like hooray we can make more profit thanks gov

            • Protractor on 15/07/2025 - 17:23
              -2

              @McMaferMur: The ol' damned if you do/don't conundrum. I'm sure if the other mob was in, this decisionwould be great news for the jv club.

              • jv on 15/07/2025 - 19:29
                +2

                @Protractor:

                I'm sure if the other mob was in, this decisionwould be great news

                I don't think you read my comments…

                This is about how merchants are likely to behave… Nothing to do with who is in government.

            • TilacVIP on 16/07/2025 - 08:45

              @McMaferMur: they're doing it anyway, with or wiithout.

            • idonotknowwhy on 16/07/2025 - 10:10
              +17

              @McMaferMur:

              They will just use this as excuse to raise prices.

              They don't need an excuse to raise prices. Businesses will charge what people are willing to pay.

              Separating the "surcharge" is just a sneaky way of listing the $5.87 coffee as $5.80.

              If they raise the prices beyond what people are willing to pay; regardless of the excuse they come up with, they'll lose customers. Someone else will setup shop and undercut them.

              Personally, I'd rather they list the actual price instead of what they do now — $5.80, I swipe my watch -> $5.87 debited. They often won't even mention / list the surcharge now.

              • McMaferMur on 16/07/2025 - 11:12

                @idonotknowwhy: Agree they dont need excuses but thry will use this as another new excuses on top of what they have raised.

          • poor_me on 15/07/2025 - 17:29
            +16

            @jv: What's stopping them charging $6.50 for it now?

            • jv on 15/07/2025 - 19:28
              -3

              @poor_me: Now they are charging $6 with 15cents surcharge.

              • poor_me on 15/07/2025 - 19:55
                +9

                @jv: If you think they'll profiteer by charging $6.50 (no surcharge) instead of $6.15 (incl. surcharge), why don't they do that already?

                • JIMB0 on 15/07/2025 - 22:10

                  @poor_me: Because if one cafe does it people will just go-to the next one. If they all do it, that's called collusion which is illegal.

                  In this case they can all do it without it being considered collusion.

                  • jv on 16/07/2025 - 00:50
                    +4

                    @JIMB0:

                    If they all do it, that's called collusion which is illegal.

                    Rubbish. There is no monopoly of small cafes. They can set prices as they wish.

                    Of course they will all do it. Is costs go up, prices go up.

                • H3R34TH4C0MM3NTS on 16/07/2025 - 10:10
                  +1

                  @poor_me: no that's not right, because they want you to see $6 on the board or menu not $6.15, for the few people who check the actual charge and ask "why did you charge me $6.15" the merchant can just say theres the fine print 2% surcharge for credit cards, but ironically if you try to give the $6 in cash they wont take it. its an absolute grub tactic, same as the "weekend and public holiday" surcharges. Just effing print the all in price so I can make a choice. you dont itemise the eggs on toast with electricity, bread , eggs , wages so why add a surcharge for the financial transaction.I notice a lot of cafe's who use dynamic menus have different prices on the weekends, and I guess thats fair enough.
                  I think there needs to be a lot more regulation on the financial service provider side though, they should not be allowed to charge per transaction.

                • jv on 16/07/2025 - 13:48

                  @poor_me:

                  If you think they'll profiteer by charging $6.50 (no surcharge) instead of $6.15 (incl. surcharge), why don't they do that already?

                  Because that will just appear to customers as a price increase.

                  After the surcharge is removed, many customers will perceive it as due the new changes made by the government, and not blame the business…

          • LFO on 16/07/2025 - 20:26

            @jv:

            will just become a $6.50 cappuccino

            Say $7.00 as we all hate little fiddly cents …

          • Dr Phil on 16/07/2025 - 21:37

            @jv: Thats not excatly saving you or me $Billions!

      • theHMASfriendship on 15/07/2025 - 18:39
        -5

        Agreed, Albo has to go

        • jv on 15/07/2025 - 19:27
          -5

          Al-GO should be the new slogan.

        • grog on 16/07/2025 - 11:58

          "Agreed, Albo has to go"

          Is that you uncle fester?

      • tomfool on 16/07/2025 - 19:34
        -1

        There is a cost to handling cash, you have a risk of theft, time taken to go to the bank etc.

      • PriceSensitive on 18/07/2025 - 12:37

        True, but at least I know the price on the tag/menu/signboard is the amount they'll be taking off the card. At that point it's the consumers choice whether they want to go ahead. Better than being told at time of payment there'll be an x% surcharge. It's not too bad when they display signage but I'm finding more often than not they either don't make it that easy to find or they don't have it at all.

        • Muppet Detector on 18/07/2025 - 19:18

          It's not too bad when they display signage but I'm finding more often than not they either don't make it that easy to find or they don't have it at all.

          It must be noticeable before you make your choice or you can refuse to pay it (the surcharge).

    • jhaley3180 on 16/07/2025 - 08:00
      +13

      You are correct, prior to 2003 Credit card Fees had to be part of the price. Then I'm 2007 the RBA allowed surcharges for debit cards…. I don't remember noticing much change after 2003. However, after the 2007 change that's when surcharges started turning up across the place. Not surprisingly prices didn't reduce when they introduced surcharges, it just provided business license to charge more.

      I hate surcharges, it makes our prices like the US. You never quite know what you'll pay, especially in businesses that now only take card payment but also charge you a surcharge for the benefit of forcing that payment method.

      • OGGazelle on 16/07/2025 - 08:26
        +1

        That's illegal, if they only accept card payment they must include the charges as part of the advertised price. Good luck getting it enforced though, ACCC sets the rules but no real litigation method.

        • Muppet Detector on 18/07/2025 - 19:23

          If they only accept card payment, you can always choose not to eat/shop there.

          Sure, legally enforcing individual compliance is prohibitive, but there are very few situations where you would be forced to use the goods/services that business provides.

          If a fee free payment method is desirable for you, May I suggest checking if that's available before you enter into a contract with that business?

          Should you have to? No.

          But we should never enter into contracts whose terms we don't agree with or know/believe are dodgy if not outright illegal.

      • Shadowsfury on 16/07/2025 - 09:13
        +1

        You might find even those places do indeed have one fee free option - such as using pure eftpos on the machine - which won't happen with tap and pay.

        • MorriJ on 18/07/2025 - 18:45

          You can use tap and go via the eftpos network if your card/bank support it.
          My Commbank card has 2 options when I select tap and go on the phone - Mastercard or eftpos SAV.

          If I choose eftpos SAV it's processed through the eftpos network the same as if I entered a card and put in a pin.

    • nobro25 on 16/07/2025 - 11:12

      You also believe companies will have to pay for Tariffs selling their goods at a loss?

    • vchar on 16/07/2025 - 20:32

      yeah, and it is just generally below 2% surcharge but it is nothing compared to 15% on weekend and public holiday surcharge.

    • Dr Phil on 16/07/2025 - 21:36

      The previous system of the merchant wearing the fees was way better.
      Nothing new here
      Nothing to figure out.

      But this will be a headache for high fee cards like AMEX as the mechant simply wont accept them any more.
      I see AMEX going back to issuing a basic low merhant fee credit card just to survive. But merchants still wont accept it.

    • paulusjr on 18/07/2025 - 22:43

      yes it use to be illegal to pass them on.. then it was legal but that was ONLY to pass on the real surcharge not a "generic" surcharge OR the cost to run the payments terminal software.

      Today the issue isn't passing on the real surcharge the issue is that merchant's are now finding themselves passing on a massive surcharge that has nothing to do with the card fee but is a generic maximum surcharge (such as 3%) which also includes the cost for them to run their payments software which they hide in the surcharge.

      Those using tyro terminals are an excellent example. Today the surcharge for Visa credit vs visa debit is very different (debit is usually half the cost), and for payments done using plan savings account (EFTPOS) it is suppose to be ZERO, but go into any store using a tyro terminal and you'll be slugged with typically a 3% surge charge with all these methods and often denied the option to pay with cash (or charged a surcharge even with cash).

      Often merchants will struggle to accept cash because these stupid terminals.

      Don't believe it? go into any store with a tyro terminal, put an EFTPOS card on the table and check what is charged to the card actually is vs what the cost of what you ordered was, I have worked in finance and have watched this unfold in the industry with disgust now get worse and worse.

      IT is outright greed on behalf of Tyro, square also doing it, so only ones left not doing it is the likes of coles and maybe woolies as they run their own payment system. (aldi also slugs for fees but I believe these are closer to the real cost and EFTPOS I believe remains free as it should be)

      Its beyond belief this situation has occurred, and most people aren't familiar enough with how the fee structure works to realise they are being outright robbed at the payments terminal. Also no point arguing each business I have asked have no idea whatsoever how the fee works they say. they put the card in and tyro works it out.

  • sghetti on 15/07/2025 - 16:56
    +9

    I'd expect that it will reduce card offerings and deals that come with them. Qantas/rewards cards with bonus points etc. Like you said, those fees and charges will be exposed elsewhere, or other costs will be brought down like the prior to ensure profits aren't lost.

    • 6079 Smith on 15/07/2025 - 22:02
      +1

      So interchange fees were fiddled with a few years ago, from what I’ve read the caps on fees would relate to what the companies who own the eftpos machines (eg Square) can charge the merchants, not how much Mastercard can charge, so hopefully it doesn’t impact points too much

    • joelmuzz on 16/07/2025 - 16:34
      +2

      The big stores/online add no surcharge anyway. So it will mostly have no impact.
      Just means the ticket price is guaranteed to be the real maximum price, which is better.

  • Hvrd on 15/07/2025 - 16:56
    +55

    the price tag should be all you pay - we are not usa

    • Protractor on 15/07/2025 - 17:12
      +3

      These days we are all but the USA.

    • jhaley3180 on 16/07/2025 - 08:00

      100%

    • smartazz104 on 16/07/2025 - 08:48
      +1

      Hey that rhymes.

    • Charity on 16/07/2025 - 11:19
      -6

      We are the USA without any of the freedoms

      • LFO on 16/07/2025 - 20:29

        Nah … just the pick up trucks and the back-to-front baseball hats …

      • Protractor on 16/07/2025 - 20:31
        +2

        Freedoms? USA? LOL. They disappeared 250+ years ago. And lately the few remnants have been eviscerated . You can't even protest the govt without getting jailed. It's a pus bucket.

  • soan papdi on 15/07/2025 - 17:13
    +10

    People are phoning into ABC radio to say 'Hooray, no more card surcharges'. Seems like a very simplistic view.

    It is actually that simple. Businesses that can have low prices while absorbing the surcharge, fully or partially, will survive longer. It’s this thing called competition in the market that western society preaches to the whole world. Time for us to practise it at home.

    • Binchicken22 on 17/07/2025 - 20:55
      +1

      Lol You are very naive.

      • soan papdi on 17/07/2025 - 21:12

        Lol, thank you, very kind.

    • paulusjr on 18/07/2025 - 22:50

      read my post, a long while back it was about surcharge being passed on now its about passing on an additional fee that the customer doesn't understand is not optional based on your type of payment method nor is it aligned to what the card providers charge. As I have advised try to use different payment methods next time you are faced with a tyro terminal and you will see.

      • soan papdi on 19/07/2025 - 15:05

        I think we are agreeing? If a business is signing up with card processing service, then they know what the commission is for each card type. They need to raise the advertised price to compensate for the charges, so what I (the consumer) pays is what is shown on the menu. Any business who signs up with Tyro should raise their advertised price by 3%. If they can't do it, change the card processor to someone cheaper and raise prices by 1% or 1.5%. I don't see what is naive about this. I don't want to do mental maths when paying to see what extra I am going to pay.

  • JIMB0 on 15/07/2025 - 17:18
    +6

    Great, now I can finally use my HSBC card and get 2% cashback instead of getting slugged 5% at dodgy massage parlours.

    • Chandler on 16/07/2025 - 10:46
      +2

      Cashback from using a HSBC card? 2%
      Surcharge for using a HSBC card? 5%
      Getting a happy ending and a STD, at the same time? Priceless.

    • tessel on 17/07/2025 - 13:29

      Pics or it didn't happen…

      • Muppet Detector on 18/07/2025 - 19:27

        Posted his pics on your favourite porn site. This site not rated R. Need to satisfy your urge to view happy endings elsewhere.

        • tessel on 18/07/2025 - 20:23

          Pics or it didn't happen…

  • Bargainitis on 15/07/2025 - 17:46
    +4

    The end result depends if Amex / Mastercard / VISA can still charge merchant fees or not. For them to exist, they have to charge those fees which means banning "surcharge" only means the merchants will price the cost in. For example:

    Currently a coffee is $5.00, you go and tap and it tells you its $5.10 with card surcharge.

    Going forward, the price will just be $5.10 and thats what you tap. Frankly, the consumers who pay cash will now share the costs for this change.

    Worse part is if surcharge is banned, there is also no transparency in the price. The example merchant can also charge $5.13 and you will never know.

    • dasher86 on 15/07/2025 - 18:46
      +13

      Going forward, the price will just be $5.10 and thats what you tap. Frankly, the consumers who pay cash will now share the costs for this change.

      People who pay card have been paying the cost of handling physical cash. so let's flip it on its head.

      • grasstown on 16/07/2025 - 18:56
        +2

        That is so wrong. It’s the reason that cash exists that merchant fees aren’t higher than what they are. Get rid of cash so that card is the only tender and you’ll see what happens

        • Mad Max on 16/07/2025 - 20:22
          +2

          Yes, first they remove card charges so they can get rid of cash without backlash. Then when cash has been made obsolete they slowly reintroduce card fees and rise them. So they get to have full unlimited control and records of every cent you and everyone else spend, plus they make you pay for it!

    • surfingedge on 15/07/2025 - 21:08
      +4

      The merchant can also charge $6 with no surcharge right now, and you will never know.

    • joelmuzz on 16/07/2025 - 16:42
      +1

      They aren't banning merchant fees. Just the list price must be the CC price with any fees already included.

      The big stores already do this, ALDI is probably the only big chain who are so tight they pass on a surcharge.

      Nothing will stop a 2% cash discount being offered. Besides the reality that cash handling and keeping the till stocked with change has it's own cost overheads. And that more and more businesses are using app/terminal ordering which costs them less wages.

    • Wiser on 17/07/2025 - 12:20

      When credit card surcharges made legal RBA had the same argument. Those who are paying with cash is paying for Interest free days and reward points etc.
      But big business contuued accepting credit or cash without giving a discount for cash paying customers or charging credi card users.
      Covid era , forced everyone to tap and the businesses charging for eftpos transactions as well.
      Nominal surcharge on credit cards are fine but not on eftpos payments.
      The banks became greedier and intriduced debit visa and changing all your ATM cards as visa/ master debit cards.
      When you tap your saving account linked card you are using your funds and paying a surcharge while VISA/MASTER mint money on using users funds. They double dip on funds which are received immediately and get card fees from merchant and pay the merchant in 3 days unless the merchant pay higher fees.

    • paulusjr on 18/07/2025 - 23:39

      The issue now is you can't generally get the coffee for $5 even if the sign says its $5 with any payment method and the fee is usually a flat fee but not usually the minimum fee either.

      Whether this changes I also doubt as the law is already clear on this and ignored today by basically all small merchants. As was previously noted only the big merchants (coles etc) are playing ball.

      https://www.accc.gov.au/consumers/pricing/card-surcharges

      Personally. It really pisses me off big time when I am told the coffee is $5 then suddenly a fee shows up that is not advertised anywhere and considerably more than I know the merchant surcharge would have been.

      I'd rather pay a bit more but know what it actually costs than know every time I walk into a small business I don't know how much "extra" they are going to add onto the bill after showing it to me.

      Was speaking to some friends the other day and they got hit with a $30 fee for paying with savings for taking their family out a local restaurant but also found out later as it wasn't mentioned when they were providing payment. Makes my blood boil and spoils the experience of supporting local businesses.

  • Mad Max on 15/07/2025 - 17:47
    +6

    I wonder if the hidden agenda is to facilitate a transition to cashless. If there was an additional cost for cashless people would resist it. But if there is no difference people will just comply.
    The government (any government!) always has an hidden agenda…

    • Meho2026 on 16/07/2025 - 07:27
      +6

      Exactly, the agenda is digital currency and a cashless society.

    • paulusjr on 18/07/2025 - 23:46

      Japan has very much pushed cash back in as a primary method of transacting in small business. I think with the level of distrust and dishonestly a move back to cash is quite possible similar to where Japan is at.

      Another possibility is things like account to account (A2A) bypassing the greedy payment intermediary could start to be popular for companies that consumers do a lot of repeat business with. When there is a level of trust who needs the intermediary.

      Gotta ask ourselves whether we get $30 of value being able to pay for a family dinner with a digital card over cash. The government can go to hell with their ideas of moving us to a cashless society where they can maximise the amount of GST they collect.

  • CaptainJack on 15/07/2025 - 17:56
    +2

    Seems kind of weird to me that the RBA proposed this. Firstly, its hardly a new or innovative idea. Secondly, as much as I hate surcharges, this seems like an incredibly minor issue compared to their actual job of planning the economy.

    • Aureus on 15/07/2025 - 19:50
      +6

      It isn't weird at all. RBA does lots of things, this is one of their responsibilities.

      https://www.rba.gov.au/payments-and-infrastructure/role-of-p…

      • CaptainJack on 16/07/2025 - 08:45
        +1

        Fair, and with all the hot air they've blown over the years, I guess its not surprising a bunch of over-paid economists have 'invented' this amazing idea.

    • 6079 Smith on 15/07/2025 - 22:04

      Unless I missed the revolution I don’t think we have a planned economy here

      • CaptainJack on 15/07/2025 - 22:13

        The interest rate is one of the most fundamental drivers of the economy, if not the most fundamental. It's not like it's a monthly update of the price of shoe laces.

  • [Deactivated] on 15/07/2025 - 18:17
    -6

    When surcharge is banned by RBA, all banks and credit card companies have to comply with it.
    Retailers cannot increase their prices, either e.g. just cannot make 5 buck coffee $5.10.

    • LockedUpLotionClown on 15/07/2025 - 18:47
      +11

      Why? That's exactly what it should be and what it used to be. All your cost of business should be reflected into the goods/service price. Makes it fair and transparent for consumers to be able to compare prices and services.

      At the moment you have no idea what your "$5 coffee" will actually cost you at most places making it difficult for consumers to compare prices. ACCC has been toothlessly fighting this bullshit for ages, but there is no policing it, so retailers have just turned card surcharges into another profit increase.

      I went to dine at a joint the other weekend, and it was 10% Sunday Surcharge + 3.5% Card Surcharge or 5% cash discount……. Had no idea what the price of the meal was going to be by looking at the menu. They ended up with none of our money.

      • surfingedge on 15/07/2025 - 21:22
        +10

        Agree. I would like to ban holiday surcharges as well.

        I have no problem with businesses charging more on a Sunday if they think their market will support it, but they should just print a separate menu with the Sunday prices.

        So the price you see is the maximum price you can be asked to pay. They could still offer a cash discount (or even a card discount, if they are being fully compliant with taxes and they realise cash handling costs more).

      • Muppet Detector on 18/07/2025 - 19:40

        At the moment, most businesses don't know how much providing that cup of coffee will cost them.

        This costs can potentially change within minutes.

        Eg, depending on the employee's award, the cost of producing that coffee may be different if prep was completed before or after 6pm (for example).

        A coffee sold and delivered before penalty rates kick in will cost less than if that same coffee was ordered before commencement of penalty rates but completed after they kicked in.

        Similarly, a coffee ordered, completed and served before commencement of penalty rates will be different to the cost of that same coffee if ordered after penalty rates kick in.

        Heck, the cost of a coffee can vary based on who actually makes the thing and at what time they make it.

    • T-man on 15/07/2025 - 22:03
      +4

      Why not? I’m a retailer here, and I set prices dynamically. They may go up or down depending on the manufacturer’s cost and the exchange rate. The merchant fee is never an issue for me; it’s the shipping cost that matters.

      • Muppet Detector on 18/07/2025 - 19:41

        Wage costs fluctuate minute by minute.

  • Trying2SaveABuck on 15/07/2025 - 18:24

    It will be pasted on to consumers but i support the change as like most Ozbargains it makes the CC churning less expensive

  • jizmo on 15/07/2025 - 18:27
    +1

    .7% fee on most standard credit cards, I'd think.
    Banks will just pick up the slack by charging based on 100K P.A average spend on most users, an extra $700 annual fee.
    Same charge, just renamed to keep the government happy.
    Banks Will Never Lose.

  • New Chump on 15/07/2025 - 18:33
    +14

    Good news for those of us who use discounted Gift Cards a lot, particularly at restaurants.

    Having to do some quick calculations under pressure at the credit card terminal because an unexpected surcharge means you now exceed the balance on your Gift Card, while your significant other (who doesn't appreciate Gift Cards and thinks you are a time-wasting idiot) is giving you death stares, was always an enjoyable end to any dining experience.

    • Muppet Detector on 18/07/2025 - 18:29

      Should be simple. Just change where the commas go.

  • Dollar General on 15/07/2025 - 18:55

    So Qantas will need to increase other fees to make up for the loss in revenue and profit from excessive surcharging

    • donman92 on 15/07/2025 - 20:36

      How is Qantas making money off this? Unless you're referring to their banking division ye

      • Dollar General on 16/07/2025 - 05:40

        Qantas charge more than what they are paying

  • neoleo on 15/07/2025 - 18:56

    I can still enjoy free coffee/matcha latte/hot chocolate + free nice donut from Daniel's Donut with different phone numbers trick :P

    So, I don't worry if coffee/matcha latte/hot chocolate become more expensive for example ;-)

    @jv @poor_me @Bargainitis @dasher86

  • JimmyF on 15/07/2025 - 19:06
    +1

    This has been reported on the news all day today, but detail on how this may work has not really been mentioned.

    The detail is, business can't add the surcharge….. 'saving' you money. Like it used to be about a decade ago.

    But really businesses will just raise the prices to cover it.

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