Latest news with #cardpayments
News.com.au
3 days ago
- Business
- News.com.au
‘Still cheaper than cash': One fee Australians are tired of paying
The bulk of Australian consumers say businesses should be banned from passing on surcharges, with figures showing it is actually a cheaper form of payment than cash. According to survey data commissioned by MasterCard, 69 per cent of Aussies believe card surcharge payments should be banned. A further 85 per cent of Australians say they think these fees should be considered as part of the cost of doing business, with 40 per cent wanting it to be factored into the advertised produce cost, while 45 per cent say the merchant should just absorb the cost. MasterCard division president Australasia Richard Wormald told NewsWire despite customer frustrations businesses should not be absorbing the costs completely. 'Digital payments are another cost of doing business, like coffee beans, rent or wages, and there are real costs involved in providing them,' he said. Mr Wormald said while merchant service fees turn the average cup of coffee up from $5 to $5.08, it is still cheaper than accepting cash, which usually adds around 20 cents per cup of coffee. Currently businesses do not pass on the cost of customers using cash. 'But card payments are actually the cheapest way for retailers to get paid, costing less than half as much as accepting cash,' he continued. 'They should build it into their pricing, just like any other input, which also makes the cost clearer for customers and builds trust.' Last month the Australian Competition and Consumer Commission reminded businesses to ensure they are being transparent with their customers before any card payment surcharges. ACCC deputy chair Mick Keogh said over the coming financial year, consumer law and compliance regarding 'misleading surcharge practices' will take top priority. 'Businesses need to ensure their customers know about any card payment surcharges upfront, and that they are only charging what it costs them to accept those card payments,' Mr Keogh said. 'We understand that small businesses need to be across a lot of information to comply with all of the laws that apply to their business, however, charging excessive surcharges and not being upfront with customers about pricing can result in small businesses losing customers. Prime Minister Anthony Albanese and Treasurer Jim Chalmers previously announced plans to move on excessive card surcharges, as part of a number of proposed reforms to help with the cost-of-living. The government said any reduction surcharges would come in consultation with the Reserve Bank of Australia. Mr Wormald said Australian businesses would likely be able to adapt if the ban on surcharges is passed by the government. 'We've seen in markets like the UK that banning surcharges saw small businesses adapt by building the cost of payments into their pricing, just like any other input,' he said. 'A ban would force businesses to take a closer look at those services, find better value, and ultimately deliver a fairer experience for consumers.' He also dismissed claims it could be inflationary because small businesses would simply slug customers $5.50 a coffee instead of the current $5 plus a $0.08 payment fee. 'The idea that factoring in payment costs would be inflationary does not really stack up. Consumers are already paying these costs through surcharges, so including them in the advertised price does not change what people are paying, Mr Wormald said. 'It just makes the cost more transparent. And in instances where businesses find a better deal that meets their needs elsewhere, factoring in a lower payment cost could lead to lower prices and be deflationary, not inflationary.'
CNA
07-05-2025
- Business
- CNA
Exclusive-Nordics and Estonia rolling out offline card payment back-up in case internet cut
HELSINKI : Finland, Sweden, Norway, Denmark and Estonia are rolling out offline card payment systems to provide a back-up if internet connections are lost, including due to sabotage, Bank of Finland board member Tuomas Valimaki said on Wednesday. The plans come after the Baltic Sea region has suffered several instances of unexplained damage to critical undersea infrastructure in recent years, and as Western intelligence services have accused Russia of committing various acts of sabotage - a charge the Kremlin rejects. "The likelihood of major disruptions has increased because the geopolitical situation has changed worldwide. There is a war in Europe, and around that war, there is all sorts of hybrid influence and harassment, which may involve disrupting or cutting connections," Valimaki told Reuters, referring to Russia's invasion of Ukraine. He said payments were a potential target because of their critical role in everyday life. Only 10 per cent of people use cash as their primary payment method in Finland, central bank data show, making the country highly dependent on card payments. "Since card payments require functioning international data links, Finland must be prepared for interruptions. Many other countries are of course in the same situation," Valimaki said, adding Norway, Sweden, Denmark and Estonia were also planning to introduce offline card payments, and possibly other nations too. Valimaki said the plans were still being developed, but offline payments can involve using terminals that encrypt and store transaction data until an internet connection can be restored. Sweden's central bank told Reuters that it hoped to establish a system by July 1, 2026, that would allow Swedes to make offline card payments to buy essential goods in the event of disruptions lasting up to seven days. Central banks in Norway and Denmark said they had already launched offline electronic payments that they continue to develop. Estonia's central bank did not immediately respond to requests for comment. Last year, the Nordic region's largest bank, Nordea, was hit by an unprecedented denial of service campaign that lasted for weeks and at times prevented customers from accessing their accounts online. All of Europe should reduce its dependence on card payments, which are currently heavily reliant on U.S. companies Visa and Mastercard, Valimaki said. "We cannot rule out that one night someone on Truth Social comes up with using payments as a pressure tactic," he said. Truth Social is the social network where U.S. President Donald Trump posts many of his ideas. To provide an alternative, Finland will introduce a national system for instant payments in a few years, while offline payments will become possible for consumers next year, Valimaki said. "We may feel like we have options, to pay with debit or credit or with Apple Pay for example, but all of those function via the Visa and Mastercard infrastructure," he said, calling for diversification. Speaking separately in Helsinki, NATO's Head of Defence Planning Section, Christian-Marc Lilflander, said finance ministers should be more involved in discussions on security to better prepare for threats in financial services. The European Central Bank is planning to introduce a digital euro, which would enable instant payments, but Valimaki said it would take years to establish the system even if it secured the political backing it needs from all euro zone countries. In another push to protect financial security, Finland is also introducing a national system of reserve bank accounts. Under the system, the National Financial Stability Authority would be able to give Finns access to their savings even if their bank was unable to operate, Valimaki said.
