Commonwealth Bank calls for ban on card payment surcharges

Currently, under RBA regulations, merchants are permitted to impose surcharges that reflect the actual costs they incur from payment facilitators. 

However, the Commonwealth Bank is pushing for these surcharges to be eliminated entirely, according to a recently released report. This comes as the RBA conducts a review of the payments system to ensure it remains equitable and aligned with modern needs.

Government and industry response 

The review coincides with the Albanese government's efforts to alleviate cost-of-living pressures, with payment surcharges becoming a focal point ahead of the next federal election. Treasurer Jim Chalmers has suggested that, depending on the review’s findings, the government may consider suspending surcharges on debit card purchases for a year.   

Australian Financial Review cited a series of bank insiders who indicated that removing surcharges altogether would be the simplest way to resolve disparities. They pointed to examples in Europe and the UK, where such practices have already been banned.   

Research conducted by Canstar last year revealed that Australians collectively paid USD 4 billion in surcharges, equating to an average of USD 140 per person annually. The cost to merchants varies significantly, from under 0.5% for EFTPOS transactions to as much as 1.5% for credit card payments via Visa or Mastercard. Digital payment providers such as Square charge even higher rates, with costs on a USD 100 purchase reaching USD 1.88.

Impact on consumers and small businesses 

While larger retailers such as Coles and Woolworths absorb payment processing fees into their pricing, smaller businesses often pass these costs on to customers. Aldi, for instance, applies a small flat fee on all card transactions.  

Finder’s head of consumer research, Graham Cooke, noted that Australians increasingly opt for the convenience of card payments despite the associated fees. A Finder survey found that 74% of Australians believe banks or card issuers should cover these costs, while only 6% think they should fall on consumers.