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(Bloomberg) — Australia’s central bank wants merchants to remove surcharging on credit and debit card payments, in a move that could save consumers about A$1.2 billion ($785 million) a year.
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The Reserve Bank estimates the aggregate impact on consumer prices from a removal of surcharging would be “very small” at around 0.1 percentage point, according to a consultation paper released in Sydney on Tuesday. The RBA will consult on its proposals for six weeks and then release a conclusions paper at the end of the year. It aims to implement the changes from mid-2026.
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Australia is currently at the extreme end of the spectrum in terms of surcharging with Europe, Canada, the UK and the US imposing a ban on debit card charges. Europe and the UK also have a regulatory ban on credit card surcharging.
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Surcharging consumers on everyday goods from morning coffee to dining out and groceries has been a source of frustration for many Australians, especially as the nation has grappled with a cost of living crisis in the aftermath of the Covid-19 pandemic. It is a topic that is frequently raised in parliament.
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The RBA estimates the annual A$1.2 billion in surcharges paid by consumers breaks down to about A$60 per card-user per year.
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The RBA is also proposing to lower the cap on interchange fees paid by business, a move that could save firms around A$1.2 billion. It will also require card networks to publish the fees that they charge in a bid to improve transparency and competition.
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“We think the time has come to address some of these high costs and inefficiencies in the system,” RBA Governor Michele Bullock said in a statement accompanying the paper. “Our goal is a more competitive, efficient, safe payments system for everyone.”
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