Australia plans to cut bank card fees, including eliminating transaction fees for 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 is conducting a review of card payment costs and surcharges and, subject to this consultation, is ready to ban debit card surcharges from 2026.
It also announced A$2.1 million ($1.4 million) in new funding for the competition authority to crack down on excessive surcharges.
“It’s about providing better service to consumers, reducing costs for small businesses and promoting a more competitive payment system,” said Treasurer Jim Chalmers.
“Consumers shouldn’t be penalized 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 concluded in 2021 that the right of merchants to charge surcharges promotes a more efficient and competitive payment system.
However, with the high cost of living faced by consumers, the issue of charging has come into focus. National Australia Bank chief executive Andrew Irvine described his experience of a 10% markup on a coffee in Sydney as “outrageous” in August.
In 2022, about 13% of payments will be made with cash, up from 70% in 2007, and that number will fall to just 4% by 2030, according to the Australian Banking Association. ($1 = 1.4843 Australian dollars)
