The proposed changes include a cap on interchange fees, which means banks will miss out on about $900 million in revenue each year, according to Professor Zhong.<\/p>\n
“Banks will experience a deduction in their banking revenue, so they need to recoup it somewhere,” she said.<\/p>\n
<\/p>\n
Cashless businesses could face a hefty impost without card surcharges. (ABC News: Greg Bigelow)<\/p>\n
Surcharges are already banned in Europe and the United Kingdom.<\/p>\n
Professor Zhong said research into the international experience demonstrated a potential for increased costs to be passed on:<\/p>\n
“Banks usually just increase card fees or they will cut back on rewards programs or reduce the offering of free services such as exemptions on monthly account fees.”One fee down, another up?<\/p>\n
A surcharge ban could lead to higher payment costs for small businesses, said Matthew Addison, chair of the small business peak body COSBOA.<\/p>\n
“Each other time [the payment providers] have lowered one fee, another fee has increased or the service package that is provided to the merchant changes,” he said.<\/p>\n
“While one fee comes down, maybe the cost of the terminal will go up.”<\/p>\n
<\/p>\n
Matthew Addison says small businesses can absorb no more costs without passing them on to consumers.\u00a0 (ABC News: Billy Draper)<\/p>\n
If payments can no longer be passed on to customers, he said, small businesses might have to increase prices.<\/p>\n
“At the moment, small business is not in a position to absorb any more costs,” he said.<\/p>\n
“Forty-five per cent of small business owners are earning less than the minimum wage.”<\/p>\n
While the RBA’s review found a lower cap on interchange fees would save business $1.2 billion a year and leave 90 per cent better off, industry groups and merchants have continued to express concern.<\/p>\n
“Big businesses aren’t surcharging because their cost structure of merchant fees is less than a quarter of what small businesses are paying,” Mr Addison said.<\/p>\n
Banks want Apple and Google pay review<\/p>\n
ABC News asked ANZ, Westpac, the Commonwealth Bank and NAB how they planned to recoup costs if the proposals went ahead.<\/p>\n
The banks said they were unable to comment while they worked on submissions for the central bank by a late August deadline.<\/p>\n
Melanie Evans, deputy chair of the Australian Banking Association and chief executive of ING in Australia, told The Business that delivering more bang for buck to Australians was important.<\/p>\n
“But if the economics of our payment systems change then, of course, business models will also change accordingly,” she said<\/p>\n
<\/p>\n
Melanie Evans says the review is a chance to look at all payment systems, including mobile wallets. (ABC News: John Gunn)<\/p>\n
The banks want mobile wallets, such as Apple and Google Pay included in the review.<\/p>\n
“We would suggest that there’s also opportunity to look more broadly at digital wallets and other forms of payments in the system,” said Ms Evans.<\/p>\n
More Australians are using mobile wallets to tap and go, with payments up almost 30 per cent in the past year.<\/p>\n
Each time a customer pays using a mobile wallet, the banks pay the tech giants a fee.<\/p>\n
<\/p>\n
More Australians are using their phone wallets, to the benefit of Apple and Google. (Unsplash: Jonas Leupe)<\/p>\n
Professor Zhong said that was where banks could offset lost revenue from the cap on interchange fees.<\/p>\n
“It would require reforms in other areas in terms of fees charged by mobile wallets to Australian banks,” she said.<\/p>\n
Stakeholders have until August 26 to make submissions regarding the RBA’s proposals.<\/p>\n","protected":false},"excerpt":{"rendered":"The Reserve Bank’s proposal to end card surcharges aims to save consumers money, but experts warn it could…\n","protected":false},"author":2,"featured_media":48638,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[32560,64,63,7105,99,41399,41400,41396,17971,41401,21371,7054,16776,31045,41398,41395,41397],"class_list":["post-48637","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-apple-pay","tag-au","tag-australia","tag-banks","tag-business","tag-card-fees","tag-card-surcharge","tag-cashless","tag-credit-card","tag-debit-card","tag-mobile-wallet","tag-rba","tag-reserve-bank","tag-retailers","tag-surcharge-ban","tag-surcharges","tag-tap-and-go"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/48637","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=48637"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/48637\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/48638"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=48637"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=48637"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=48637"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}