Small companies might put on the price of the RBA’s proposed card surcharge ban

The Reserve Financial institution of Australia (RBA) has proposed a complete ban on surcharges for debit and bank card funds.

This might imply that companies giant and small would now not have the ability to go debit or bank card charges onto their prospects.

Launched in a session paper earlier this week, the RBA’s suggestion is a part of an ongoing assessment into card cost charges and service provider surcharging.

How might a surcharge ban have an effect on small companies?

This isn’t the primary proposal to ban surcharges: The RBA’s suggestion follows plans by the Labor Authorities to ban surcharges on debit playing cards from January 1, 2026.

However small-business advocates fear concerning the impacts of forcing retailers to shoulder the burden of card charges alone.

To handle this, the RBA has proposed inserting caps on interchange charges – charges paid by a service provider to a consumer’s financial institution. It says this could save companies $1.2m yearly, so long as reductions have been handed on.

Will small companies actually be higher off?

The RBA claims that 90 per cent of companies can be higher off underneath its proposed modifications.

However small-business advocacy teams, just like the Council of Small Enterprise Organisations Australia (Cosboa) are cautious. Cosboa, as an illustration, has lauded the proposal to decrease interchange charges – nevertheless it thinks tinkering with these alone gained’t be sufficient to meaningfully cut back the burden on small enterprise.

“The diminished interchange charge is welcomed; nonetheless service provider charges embrace many different costs,” mentioned Cosboa Chair Matthew Addison. “The truth is that these charges will nonetheless be paid, simply not disclosed. That price can be baked into the value of espresso, groceries, and companies throughout the nation.”

The Unbiased Funds Discussion board was equally important. In a press release, co-founder Bradford Kelly mentioned the RBA’s plan failed to handle “elementary market failures” that imply small companies pay the lion’s share of service provider charges.

Each Kelly and Addison are anxious that small companies might find yourself footing the surcharge-ban invoice.

“For small companies already managing tight margins, this implies these prices must be absorbed into base costs, making it more durable for companies to be clear and for shoppers to make knowledgeable decisions,” mentioned Addison.

The RBA has invited suggestions on its proposal by August 26, 2025.