@UlladullaDave lol yes.

I understand why SMP is hit today - the value proposition evolves around a free terminal but SMP gets to keep all the surcharge. Not sure why Tyro is hit - from what I understand they do very little of this. It's mostly terminal rental + processing fees on each transaction.

Oh that's a great insight on the difference between them and SMP. Thanks @mushroompanda

@UlladullaDave i think that is what albo is trying to prevent, so the retailer or the payment processor wears it

@Solvetheriddle I’m not sure how Albo can prevent the charge of something that obviously costs money.

It’s like telling Armaguard (people that transport cash around in armoured trucks) that their services should be free - because cash transactions should be free.

Which would be rather Quixotic @Solvetheriddle

Surcharging seems well past its use by date given the ubiquity of card over cash these days and probably should long ago have been rolled into CODB rather than itemised and passed on to consumers at POS.

@mushroompanda idk, you may be trying to rationalise with the irrational lol

i will say this, it is a global thing, and governments seem to have targeted fees to varying degrees. US Canada spring to mind

Price controls almost always have the exact opposite of the intended effect. That is; less supply, less choice and higher prices.

Madness. Something that even a casual glance at the historical record will demonstrate.

Anti-trust/competition controls are a different story, and if the government were serious it would pursue things at that level.

The duopoly of Visa/Mastercard and a highly concentrated banking sector are way more a factor then the decisions of small business on whether or not to pass on costs. There's signal in the fact Visa has NET margins north of 45%. If that's not a sign of pricing power, I don't know what is.

At any rate, it's silly because even if they do ban businesses from passing on costs as a surcharge, it will simply show up in higher prices for goods/services -- which, as far as I am concerned, is entirely reasonable. Any business is seeking to make a decent margin above the holistic cost of delivery.

And besides all that, are these surcharges really the biggest driver of 'cost of living' stress?

My 2c, over the longer term, the owners of the payments infrastructure will be disintermediated anyway. There's a certain open source payment network that offers faster settlement, greater security and significantly lower costs -- even if people are dealing with AUD at the surface level.

@Strawman You've summoned the restraint of a thousand monks not to mention the b-word!

Price controls almost always have the exact opposite of the intended effect. That is; less supply, less choice and higher prices.

That seems to be a bit of a stretch likening it to a price control. A surcharge should really only exist where a business is incurring a significant/material expense that is outside its normal operating expenses. It's hard to argue accepting cashless payment meets that definition in the year 2024.

Fair cop @UlladullaDave, but it quickly gets into a game of semantics at some point.

Whether the business recoups the cost via a surcharge or higher pricing is essentially irrelevant from a customer perspective. So while what is being proposed is not a price control per se, it has the same impact in my view (and totally misses the root cause of the cost).

But, yeah, I should have been more precise in my language.

And as for the b-word @mushroompanda , I feel were still at a stage where you can't talk about it without sounding like a crazy person. It's a loaded term that carries a lot of baggage! Lol

Whether the business recoups the cost via a surcharge or higher pricing is essentially irrelevant from a customer perspective. So while what is being proposed is not a price control per se, it has the same impact in my view (and totally misses the root cause of the cost).

Don't get me wrong, I understand the government is doing it mostly to look as though it's doing something. But I do think most people have expectations that the price they see is the price they will pay, especially as debit cards are more or less viewed as the cash equivalent in a cashless world.

I see this as good for a change. Not that I think these costs still won't be passed on to customers.

I see it as good as now you can compare apples with apples and not one coffee shopping charging you $0.50 and another one charging at $0.20. This way you can compare the price of a coffee between the two easily.

Agree SMP looks challenged - though their business model should never have existed IMHO.

I am certainly a supporter of the free market, but I agree this is a good thing and take a view similar to you @Mujo.

Surcharges, similar to other 'hidden' or added-on fees, should not exist.

I read this criticism earlier: "This proposed ban on debit card surcharging will not make debit card payments free, just hide the cost away from the consumer."

I think this is a terrible take. If business wants to charge extra and ultimately make their service more expensive, that's on them. As long as the customer is able to clearly see the price they are paying for the goods/services. If any business takes the piss, this is where I think supply and demand will do it's thing and it will incentive competition.

I think this is a terrible take. If business wants to charge extra and ultimately make their service more expensive, that's on them. As long as the customer is able to clearly see the price they are paying for the goods/services.

Exactly!

Here's a reservation confirmation I got this morning. There is a reason businesses add the "discretionary" charge to the final bill rather than including it in the menu price. It's about hiding charges so customers can't actually see what the total is until the bill comes.

@Strawman love the Bitcoin reference to payment rails (Not sure that its got purported 24,000 transactions per second throughput of the global Visa network). Going to need something at a higher layer (eg. a lightning backed AUD stablecoin) but don't want to digress into a bitcoin geekout (albeit, there's probably money to be made in there as well)

Certainly there is money to be made in global payments (and clearly a percentage of the transaction value is the model). If anyone is interested and has a spare 4hrs, Acquired did an excellent podcast on the history of Visa including its commercial model https://www.acquired.fm/episodes/visa

There are no end of companies trying to capitalise on this model ... Visa, Mastercard, Amex, Paypal, Block, Stripe, Adyen, ApplePay, GooglePay etc. Apparently its going to be a 5Trillion USD market and has 13% CAGR in the next 10 years. https://www.custommarketinsights.com/press-releases/b2c-payment-market-size/

I've got to wonder if a little Aussie Fintech like Tyro or some stupid regulations from our current government really stand a chance against such a juggernaut trend. Well capitalised banks can't keep Branches or ATMs open and have had to tip $50m into Armaguard to keep them going for the next 12 months.

DISC: HELD IRL (but wish I'd sold long ago)

I'm all for this change to the debit card surcharge. When this was brought in, the rule/law stated that you could only charge the customer what your actual fee was to process the payment. In almost all cases that meant credit cards cost more than debit cards which is fine. But now many businesses charge a flat fee and it's always higher than what the debit card charge is.

So even if I want to avoid paying the highest fee by using my debit/eftpos card I can't anymore. I've challenged a few businesses on this over the years but most don't seem to know they are actually breaking the rule/law.

I have no problem with business passing on genuine costs but I do have a problem with them charging me more and ignoring the rules/laws, so bring it on I say...

Here is the RBA link that explains it all if anyone is interested -

https://www.rba.gov.au/payments-and-infrastructure/review-of-card-payments-regulation/q-and-a/card-payments-regulation-qa-conclusions-paper.html#surcharging-general-q2