The Albanese government has announced a plan to ban debit card surcharges.
The announcement was made in a press release from the Prime Minister’s office this morning. The press release said the proposed ban would be conditional on achieving lower costs that would benefit small businesses and consumers.
The Australian Competition and Consumer Commission (ACCC) will also receive $2.1 million in funding to crack down on banks and financial services involved in “illegal and unfair” surcharging practices.
The targeting of excessive surcharges is part of a larger strategy as Prime Minister Anthony Albanese said it was intended to contribute to the government’s “number one priority” of easing the cost of living.
“That’s why we have announced this additional funding for the ACCC while we wait for further work by the Reserve Bank of Australia,” he said.
The use of card payment systems has increased dramatically in Australia, with a Reserve Bank report showing that in 2022 only 13 percent of payments by consumers were still made with cash. Canstar research reported by 9News found that in the same year Australians collectively paid $4 billion in card payment surcharges.
This morning the co-founder of Independent Payments Brad Kelly forum told ABC News that the cost of facilitating debit card payments for vendors has gone up “dramatically”.
“So if we can get that right and get the underlying fees fixed then we have some way forward, which is great news”, he said.
The government’s plan may lead to businesses absorbing the costs involved in debit transactions, but as debit is relatively inexpensive as a payment system there may be room to tamp down on excessive surcharges.
“We think the reserve bank, ACCC, and Government needs to work together,” he said. “The RBA needs to find its teeth as the regulator to get this moving through.”
The proposal will come into effect on January 1 2026 if consultation with the RBA suggests vendors and customers will be safeguarded from price rises if surcharges are banned.
Photo: Credit Card by Thomas Kohler is available HERE and is used under a Creative Commons License. This image has not been modified.
