Reserve Bank to end debit and credit card surcharges, small business to wear cost

The Reserve Bank wants to end debit and credit card surcharges in Australia in a move it says would save consumers 1.2 billion dollars each year.

Transcript

00:00Late last year, the federal government announced that it wants to ban charges, consumers being

00:08charged for debit card transactions, but that would be subject to the RBA review. Now that

00:14RBA review has happened, they've undergone consultation with many stakeholders, including

00:20small businesses and merchants and banks. And what they've proposed is even a step further

00:27of not just banning debit card fees, but also credit card fees that the consumer pays.

00:34Now, the question has long been, well then, who pays that fee if the consumer's not paying?

00:39At the moment, small businesses were passing that cost on to the consumer. Now the small

00:44business is going to have to wear that cost. So what will small business do now then?

00:51So the small business, this is likely to be very confusing for them. A lot of them have

00:56in recent years made the decision to pass that cost on to the consumer because they weren't

01:01able to bear it. And small businesses now may have to hike their prices that they charge consumers

01:09in order to be able to cope with this. And then what happens now?

01:15The federal government now has to look at what the RBA has proposed. They're going to undergo

01:20another period of consultation until around the end of August. And then if they agree with what the RBA

01:27is proposing, this would be implemented by July next year. But one thing that they're really probably

01:34likely to get pushback on is small businesses saying, you know, this is unfair, why do we have

01:40to pay? Why don't the banks pay here? And the question the government now needs to answer is whether,

01:46if small businesses are actually going to pass this cost on to the consumer,

01:51this is actually beneficial for the consumer. Reporter Nassim Khadem from Melbourne there. Thank you.