Australia's Reserve Bank to Ban Card Surcharging from October 1

Australia's Reserve Bank of Australia (RBA) is set to ban card surcharging for eftpos, Visa and Mastercard transactions from October 1. This change follows a reduction in the interchange fee cap on consumer credit cards from 0.8 per cent to 0.3 per cent, which B2Bpay estimates will remove around $660 million a year in revenue from banks.

B2Bpay has warned that this regulatory change may weaken the incentives for businesses to use credit cards for routine spending, as banks have already started cutting points earn rates and increasing annual fees. Many business owners rely on rewards programs to offset travel and operating costs.

B2Bpay argues that businesses should focus less on card earn rates and more on increasing the share of spending that can be put on a card in the first place. The company's model allows businesses to use credit cards for expenses, such as supplier invoices, while recipients receive funds through their preferred payment method.

Jane Grant, chief of B2Bpay, said: 'The surcharge ban is a meaningful step toward a simpler and fairer payments system, and it is a clear win for consumers.' However, she warned that businesses should reassess their strategy, as the opportunity to earn rewards has shifted.