Australia targeted “hefty” fees in a billion-dollar market where Visa and Mastercard dominate Tuesday, taking aim at companies that charge customers for tap or bankcard payments.
The left-wing government of the nation declared that it will “ban debit card surcharges” starting in 2026 and endeavour to reduce the expenses associated with other electronic payment methods.
Less than 16 percent of transactions in Australia are currently made with cash, which bodes well for electronic payment companies.
They charge retailers a fee of one to two percent to process each payment, taking a piece of nearly every transaction.
Australia’s central bank estimates merchants paid more than US$4 billion 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.
This year, in order to resolve an antitrust probe, Visa and Mastercard in the US agreed to cap transaction fees and pay $30 billion.
Afterwards, a judge threatened to reject the agreement for being too friendly to Visa and Mastercard.
Fee limitations have existed for a long time in the European Union.
Companies that issue credit and debit cards have previously expressed concern that regulations will reduce market competition and merely hide consumer costs.
