A Sydney MP has called on the Reserve Bank to end surcharges on card transactions and tap-and-go phone payments, launching a petition to review the pesky fee costing Australians $4 billion. dollars per year.
Jerome Laxale, who represents Bennelong, has launched a campaign to amend 20-year-old provisions that charge businesses to use card technology, with those fees then passed on to customers.
Laxale said it was time to review the rules and called on Commonwealth Bank and Westpac to do something about it.
‘We are in the middle of a cost of living crisis. Consumers are charged blended rates, from 1.1 to 1.6 percent, and it all adds up. For consumers, that’s about $140 a year,” he told NewsWire.
‘Cash is down to 30 percent, debit is the new cash. Why do we keep paying increasingly exorbitant fees every time we present our card or tap?
Their petition comes ahead of the RBA’s “holistic review” of payments regulations, including greater transparency around costs and how they are passed on to consumers.
The central bank’s Payment Systems Board will receive submissions in the coming weeks and will begin consultations in December.
While Laxale said he preferred the RBA to address the issues, he intends to push for further action from the government if a deal cannot be reached.
Bennelong MP Jerome Laxale is lobbying the RBA to remove fees for digital card payments
“I want the RBA to do what other reserve banks have done around the world and legislate in favor of small businesses and consumers, because inequality here no longer makes sense,” he said.
“I think the good times should come to an end for these banks and card issuers.”
Earlier this year, Canstar research found Australians were paying $4 billion a year in card surcharges.
Year over year, the amount increased 6.4 percent, or $400 million, due to rising total transaction costs caused by inflation.
Earlier this year, Laxale grilled the bosses of the big four banks during a parliamentary inquiry, asking them why a $5 coffee costs him $5.08 when paid with a debit card.
While debit cards incur a payment fee of less than 0.5 percent for merchants, the fee can range between 1 percent and 1.5 percent for Visa and MasterCard credit cards, depending on the RBA.
Bennelong MP Jerome Laxale said card surcharge regulations were outdated
Westpac boss Peter King acknowledged the rules were “confusing” for customers and said customer surcharge rates should be reviewed.
“We really have to think about whether a surcharge is worth it, because I’m not sure it’s politically motivated,” he said.
“There’s no other cost in a business that people can overcharge.”
Commonwealth Bank chief executive Matt Comyn said he believed the $4 billion figure was exaggerated and said Australia had some of the lowest debit interchange fees in the world.
“In general, there is never anything that is free,” he said.
“Businesses are paying less by using electronic payments than by using cash… In this case, it really comes down to whether the lower costs of those inputs are passed on to consumers.”