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SYDNEY (Reuters) - Australia is planning to reduce bank card surcharges, including the elimination of transaction fees on debit cards, the government said on Monday, as the use of cash declines in the country.
In a media release, the government said the central bank was undertaking a review of the merchant card payment costs and surcharging, and subject to that consultation, it is prepared to ban debit card surcharging from 2026.
It also announced A$2.1 million ($1.4 million) of new funding for the competition regulator to tackle excessive surcharges.
"This is all about getting a better deal for consumers, reducing costs for small businesses and promoting a more competitive payments system," said Treasurer Jim Chalmers.
"Consumers shouldn't be punished for using cards or digital payments, and at the same time, small businesses shouldn’t have to pay hefty fees just to get paid themselves."
The Reserve Bank of Australia had concluded in 2021 that the merchant's right to surcharge promotes a more efficient and competitive payments system.
However, as consumers struggle amid high costs of living, the issue of surcharging has come under spotlight. National Australia Bank chief executive Andrew Irvine in August labelled his experience of paying a 10% surcharge for a coffee in Sydney as "outrageous".
Around 13% of payments were made using cash in 2022, down from 70% in 2007, and that number is projected to fall to just 4% by 2030, according to Australian Banking Association. ($1 = 1.4843 Australian dollars)
(Reporting by Stella Qiu; Editing by Lincoln Feast.)
