Debit and credit card surcharges will be eliminated from 1 October, as part of Reserve Bank reforms that will do away with extra checkout fees on Visa, Mastercard, and Eftpos payments.
The RBA estimates the changes will save consumers about $1.6bn a year in surcharges, but the big banks and credit companies are likely to recoup the costs of processing transactions in other ways, including through fewer perks for cardholders.
The RBA flagged the changes in March, with the governor, Michele Bullock.
About 16% of Australian businesses surcharge, according to the RBA. When you make a payment in one of these stores or restaurants, you pay an extra fee when you tap your card which the merchant uses to cover the cost of processing the payment.
Scheme fees are also passed on to consumers, the RBA says.
The RBA has effectively banned these costs from being passed on directly with the end of surcharging.
However, Tindall says plenty of card issuers are using the RBA reforms as an opportunity to “completely reset their credit card offering”.
When the RBA reviewed the surcharge scheme, some banks said they would have to hike credit card fees and interest rates while slashing rewards and points.
In its review, the central bank found this would be an intended consequence of the reforms, as debit card surcharges were already subsidising the rewards accruing to credit cardholders.
“I would use an analogy of a cake,” says Prof Angel Zhong, a finance expert from RMIT University.