Australians now use cash for less than 16% of transactions, spelling boom times for electronic payment providers. — Image by freepik
SYDNEY: Australia took aim at firms charging consumers for tap or bankcard payments Tuesday, targeting "hefty" fees in a billion-dollar industry dominated by Visa and Mastercard.
The country's centre-left government said it would "ban debit card surcharges" from 2026 and work to lower the cost of other types of electronic payments.
Australians now use cash for less than 16% of transactions, spelling boom times for electronic payment providers.
They take a cut of almost every transaction, charging retailers a fee of between one and two percent to run each payment.
Australia's central bank estimates merchants paid more than US$4bil (RM17bil) in transaction fees from 2022-2023 alone.
Many small shops pass along these costs to the consumer. But some larger companies – such as global retail chains – are often able to negotiate substantial discounts.
The government said it was determined to bring costs down and to stop small vendors from being gouged.
"Consumers shouldn't be punished for using cards or digital payments, and at the same time, small businesses shouldn't have to pay hefty fees just to get paid themselves," said economy minister Jim Chalmers.
In the United States, Visa and Mastercard this year agreed to limit transaction fees and pay US$30bil (RM130bil) to end an anti-trust investigation.
A court has since threatened to reject that deal as overgenerous to Visa and Mastercard.
The European Union has longstanding caps on fees.
Credit and debit card companies have previously warned that regulation would mean less competitive markets and only mask the cost for consumers. – AFP
