Can Australia ban debit card surcharges?
It is reported that Australians are paying about $500 million a year on debit card surcharges.
The Albanese Government plans to ban these surcharges to save Australians from having to pay the fees that the retailers are charged.
Unless of course Albanese intends to stop the card companies from charging the retailers these fees.
The consumer already has the power to avoid paying a debit card surcharge.
Don’t tap and pay with your card!
Swipe it and enter your pin number. This incurs minimum card fees to the retailer, and should therefore not incur a fee to the customer. Some will charge that small fee on transactions under around $10.
When you tap and pay, you use the Visa and MasterCard services, and these companies charge the retailer for the service.
When you swipe it and enter your pin number, your bank pays the retailer, without getting Visa or MasterCard involved.
Banning credit card surcharges.
Banning credit card surcharges is a totally different story.
That credit card surcharge covers your interest free period, your rewards points and other credit card benefits.
The credit card companies, normally Visa and MasterCard charge the retailer for these costs.
The retailer should not be forced to pay for these for you, so they pass the charge onto you, the beneficiary of these services.
Some people say that only a few pass the charge on, but:
Many retailers, such as Coles and Woolworths, include that credit card surcharge in their normal price, whether you pay by Credit card, Debit card or Cash.
Some retailers, such as ALDI, and other companies, make a point to only pass on the card surcharges to people who pay by card, but do not charge those who pay by cash, for these surcharges.
How will the Government’s plan to ban retailers, such as ALDI, from passing on these costs after ALDI, and other companies who avoid charging the cash paying customers, from recouping these costs work?
Simple, they will have to do what other companies do, and pass these costs on to everyone with higher product prices instead.
Someone has to pay that $500 million a year in surcharges, that the card companies charge the retailers.
All retailers must pass their running costs on to the customer, one way or another.
https://theconversation.com/banning-debit-card-surcharges-could-save-500-million-a-year-if-traders-dont-claw-back-the-money-in-other-ways-241354