Latest news with #eftpos
ABC News
a day ago
- Business
- ABC News
Reserve Bank moves to end debit and credit card surcharges and cap fees for businesses
The Reserve Bank wants to end debit and credit card surcharges in Australia in a move it says would save consumers $1.2 billion each year. Under the central bank's proposal, the eftpos, Visa and Mastercard networks would be allowed to ban surcharges — something the RBA currently prohibits. An RBA review found the current system was outdated and no longer achieving its aim of steering consumers towards more efficient payment methods as cash usage declined. "Our goal is a more competitive, efficient and safe payments system for everyone," RBA governor Michele Bullock said. The changes would fall under the central bank's existing powers and not need the government to pass legislation. However, the RBA noted the government could ban surcharges in the future if they managed to linger. Small business operators, including cafe and shop owners, have previously expressed concern about a surcharge ban, worried they will end up footing the bill and need to raise prices more broadly to cover payment costs. However, the RBA also wants to lower a cap on interchange fees paid by businesses, which would save them $1.2 billion a year and leave 90 per cent better off. The interchange fees are charged by payment service providers — for example, the major banks, Square, Tyro — to merchants, including online sellers. "The proposed reductions to interchange caps would benefit small businesses the most as they tend to pay fees closer to the existing caps," the RBA said, noting larger operators already tended to use scale to negotiate lower fees. Foreign interchange fees will also be capped to reduce costs for business accepting international cards. Late last year, the government proposed banning surcharges on debit cards from January 2026, subject to the RBA review. The RBA said the industry feedback was that it was simpler to just remove surcharges on both debit and credit cards to avoid confusion and implementation issues. There are 8 million so-called combination cards in circulation in Australia that require the user to select whether to use it as a debit or a credit card. The RBA has also proposed increasing transparency around fees by requiring card networks and payment providers to publish their wholesale fees. "Transparency from these providers will help businesses find the best deals and encourage competition," Ms Bullock said. Submissions to the review highlighted the increasing complexity of fees, which providers would also need to work with industry to simplify. There will be six weeks of consultation following this release, with a final paper wrapping up the review expected by the end of this year. American Express does not fall under the RBA's remit due to its structure so will not be covered by the proposed changes, but the RBA says it could choose to ban surcharging also.
Finextra
10-06-2025
- Business
- Finextra
Australian Payments Plus to bring least-cost routing to online Cick to Pay transactions
Australian Payments Plus (AP+) has selected Giesecke+Devrient (G+D) to develop eftpos Click to Pay with integrated least-cost routing (LCR), a project that is billed as a world first for online debit card payments. 0 This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community. Click to Pay allows consumers to make fast online purchases without manually entering card details, replacing payment card details with a digital token. By integrating Click to Pay with eftpos, merchants will have the option to move away from costly card scheme networks by automatically routing the payment to the lowest-cost network. In an April 2024 report, the Reserve bank of Australia found that the cost of accepting debit card transactions is nearly 20% lower for merchants that have LCR turned on compared with those with LCR turned off. While LCR is widely enabled for in-store payments (70%) and increasingly for mobile wallets (30%), online guest checkout payments have historically lacked this functionality. Adrian Lovney, chief payments and schemes officer at AP+, says:'Click to Pay with eftpos combines the seamless, secure online checkout experience customers expect with the added benefit of least-cost routing - helping put downward pressure on the cost of accepting payments,' AP+ has been working with Google to roll out eftpos functionality and least-cost routing (LCR) on transactions made via Google Wallet, with ANZ and Suncorp as the first two issuers live. Lovney says the programme will be rolled out more widely in 2026.
