RBA proposes to lower cap on interchange fees
0
This follows an extensive public consultation process since the release of an Issues Paper in October 2024. The Payments System Board has reached the preliminary view that it would be in the public interest to:
remove surcharging on eftpos, Mastercard and Visa cards. Consumers currently pay around $1.2 billion in card surcharges each year. Surcharging is no longer achieving its intended purpose of steering consumers to make more efficient payment choices: avoiding surcharges has become harder as cash usage has declined, businesses are increasingly charging the same surcharge rate across debit and credit and there are significant challenges with enforcing the current surcharging rules. Removing surcharging would make card payments simpler, more transparent and help to increase competition in the card payments system.
lower the cap on interchange fees paid by businesses. This could save businesses around $1.2 billion in interchange fees a year. Around 90 per cent of Australian businesses are estimated to be better off under the proposed policies. The proposed reductions to interchange caps would benefit small businesses the most, as they tend to pay fees closer to the existing caps. Introducing caps on foreign interchange fees would help to lower fees for all businesses accepting international cards.
require card networks and large acquirers to publish the fees they charge. Improving transparency and competition will help all players better understand the fees they are charged and make it easier for businesses to shop around for a better deal.
The RBA invites feedback on the proposed policy options and draft standards by 26 August 2025. The RBA will draw on this feedback to finalise reforms that are in the public interest in line with its objectives of a safe, competitive and efficient payments system. The RBA intends to publish these conclusions and an implementation timeline for any regulatory steps by the end of the year.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Guardian
6 minutes ago
- The Guardian
Queensland Productivity Commission argues construction industry ‘reset' needed to fix housing crisis and deliver Olympics
Queensland's Productivity Commission has flagged a broad construction industry 'reset' that could threaten existing enterprise bargaining agreements, arguing it may be required if the state is to build its way out of a housing crisis – and host the Olympics. The commission released an interim report on Thursday into improving productivity in the construction sector that called on the Queensland government to permanently remove so-called 'Best Practice Industry Conditions' (BPICs) from its procurement policy. Adopted under the previous Labor government in 2018, BPICs outlined construction union workers' pay and conditions for all major state projects. Union proponents claim BPICs improved safety and lifted standards and created apprenticeship opportunities for women and Indigenous workers – industry opponents complained it led to cost blowouts and worksite shutdowns. Sign up: AU Breaking News email The Liberal National party deputy premier, Jarrod Bleijie, hit pause on BPICs in November until the re-established Productivity Commission completed its building industry review. But the interim recommendations of that review go beyond a call to permanently scrap BPICs – arguing 'a broader industry reset' was required if Queensland was to 'meet the needs of its growing population, match infrastructure commitments and deliver the 2032 Olympic and Paralympic Games'. The report cited industry stakeholders as blaming BPICs for a 'a significant slowdown in site productivity on public construction' workplaces that had enabled similar conditions to 'creep into the private sector through the rollout of BPICs-like conditions in [EBAs)]'. 'Removing BPICs alone is unlikely to be sufficient to shift construction productivity to a growth path or improve behaviours on government construction sites,' the commission wrote. 'Given that BPIC-like conditions now seem to be embedded in industry practice, including in enterprise bargaining agreements that are not due to be re-negotiated until mid-2027, it is likely that a broader industry reset is required.' Asked at a press conference after the release of the interim report if the LNP would permanently scrap BPICs, the treasurer, David Janetzki, said he would wait for the final report before making any announcements. However, the treasurer said that declining productivity 'cannot be tolerated'. The Queensland Council of Unions denies that BPICs affected worksite productivity. In May it released a report it commissioned from University of Queensland emeritus professor of economics John Mangan that found post-Covid cost increases were primarily driven by global supply chain constraints and material shortages – not labour agreements or public procurement standards. The QCU general secretary, Jacqueline King, said at the time that BPICs 'did not drive up costs or damage productivity' but improved safety, lifted standards and created real opportunities for apprentices, women and Indigenous workers. King said the commission's interim report 'missed the boat on the most important thing of all: people'. Sign up to Breaking News Australia Get the most important news as it breaks after newsletter promotion The union secretary said 'any serious conversation about lifting productivity' in the construction industry had to start with fixing what she said was a 'crisis in building and retaining a Queensland workforce'. 'There's no shortage of Queenslanders willing to work in construction but this is an industry stuck in the 1970s, with 55-hour weeks, inflexible work arrangements and poor workplace cultures driving people away,' King said. 'If we are serious about addressing the skills shortage and building the housing and infrastructure we need for our ever growing population in the lead-up to 2032 and beyond, we need to focus on how to attract a homegrown labour force instead of migrant workers.' The peak national body for construction and infrastructure contracting companies backed the interim report as supporting 'many of the reforms the industry has long been calling for', including scrapping BPICs. 'Queensland has a once-in-a-generation infrastructure task ahead,' the Australian Constructors Association chief executive, Jon Davies, said. 'This report confirms the need for urgent reform and gives us a clear roadmap to get started'. The LNP is also pushing legislation to override more than a dozen planning laws – including heritage and environment protection laws – to build a swathe of venues for the 2032 Brisbane Olympic and Paralympic Games.
Reuters
36 minutes ago
- Reuters
Australia wipes $10 billion off student loans, targeting cost of living relief
SYDNEY, July 31 (Reuters) - Australia's parliament on Thursday passed a law to cut student loans by 20%, wiping more than A$16 billion ($10.31 billion) in debt for 3 million people, and fulfilling a key election promise to help mitigate the rising cost of living. The law is the first passed by Prime Minister Anthony Albanese's centre-left Labor Party since being re-elected in May with one of the country's largest-ever majorities. 'We promised cutting student debt would be the first thing we did back in parliament – and that's exactly what we've done,' Albanese said in a statement. 'Getting an education shouldn't mean a lifetime of debt.' Education Minister Jason Clare said the measure would help 'take a weight' off the backs of young people. 'Young Australians don't always see something for them on the ballot paper, but they did this year and they voted for it in their millions,' he said at a press conference. 'And we're repaying now the trust that these young Australians have placed in us.' Millennials and Generation Z made up 43% of the 18 million people enrolled to vote in Australia's May general election, outnumbering Baby Boomers. Seizing on the generational shift, Labor made cutting student debt a key election promise, framing it as a measure to ease living costs and tackle intergenerational inequality. The government said reducing student loans by one-fifth was equivalent to more than A$16 billion in debt relief for three million Australians. It would mean a university graduate with an average loan of A$27,600 would have A$5,520 wiped, the government said, adding the changes would be backdated from June 1, 2025, before the loans were indexed 3.2% for inflation. The law would also raise the minimum repayment threshold from an income of A$54,435 to A$67,000, reducing the amount low-income earners would have to pay. ($1 = 1.5516 Australian dollars)
Reuters
36 minutes ago
- Reuters
Australia June retail sales jump as discounts, Nintendo Switch lure shoppers
SYDNEY, July 31 (Reuters) - Australian retail sales surged in June as the launch of Nintendo's Switch 2 and discounting at the end of the financial year drew consumers back to the shops, though sales volumes for the second quarter as a whole were subdued. Raising hopes that a long-awaited recovery in consumption could be on the way, retail sales jumped 1.2% in June from May, when they rose 0.5%, data from the Australian Bureau of Statistics showed. That was well above forecasts of a 0.4% increase and marked a second straight month of gains as well as the biggest monthly climb since March 2022. "After steady growth throughout the year, mid-year sales events increased spending on discretionary items like furniture, electrical goods and clothing items," said Robert Ewing, the bureau's head of business statistics. "Turnover for electrical and gaming retailers was lifted further by the much-anticipated launch of the Nintendo Switch 2, which delivered record sales." The data is not expected to have much impact on interest rate policy. Investors are pricing in a near-certain chance that the Reserve Bank of Australia could lower its cash rate of 3.85% by a quarter-point next month. Rates are seen bottoming out near 3.1% by early next year. The RBA has cut interest rates by 50 basis points since February, but consumers have stayed stubbornly frugal, choosing to save windfalls from tax cuts rather than spending. Thursday's report showed sales gained across the board, except for spending at cafes and restaurants. Spending on household goods items jumped 2.3% while spending at department stores surged 1.9%. For the quarter, sales volumes edged up 0.3%, better than forecasts for a flat result, but still historically sluggish, especially given strong population growth. It was the last set of data for the retail sales series, which will be replaced by a monthly household spending indicator that covers 68% of household consumption, more than double the retail survey.
