Banks Face Big Losses as Credit Card Surcharges Are Abolished

A ban on surcharges for credit and debit card payments is set to take effect in Australia on October 1, following a decision by the Reserve Bank of Australia. The move is expected to save consumers around $1.6 billion annually.

A recent survey found that over 40% of Australians are unaware of the upcoming change. Banks will likely absorb some of the costs and pass them on indirectly through product or service pricing.

Banks have begun responding to the ban, with several major banks announcing interest rate hikes and annual fee increases for credit cards. For example, St George is lifting its Amplify Qantas Platinum credit card interest rate from 20.99% to 23.99%, while also increasing its annual fee.

The ACCC advises businesses to review their pricing and ensure transparency about price increases.