Card Surcharge Ban May Not Deliver Savings for Consumers

A ban on card surcharges is set to come into effect in Australia, but experts warn that consumers may not see significant savings as retailers and banks adjust their pricing strategies.

The Reserve Bank of Australia (RBA) has implemented the reform to deliver savings for shoppers, but it could lead to price increases elsewhere. Under the new rules, merchants must either absorb the cost or build it into their prices.

Some experts believe that retailers may offer discounts for cash payments, which could result in savings of up to 10% off the transaction price. However, this would require businesses to keep a float and make frequent trips to the bank.

The RBA has also cut interchange fees, the fee paid by the merchant's bank to the customer's bank each time a payment is processed, from 0.80% to 0.30%. This change is intended to compensate payment providers, but it remains to be seen whether small businesses will actually receive the benefit.