Retailers will see a reduction in their cost of doing business should the new standards for Australian card payment systems proposed by the Reserve Bank of Australia this week be approved.
Surcharging frameworks proposed by the RBA include more defined guidelines around card acceptance costs, statements from banks to merchants stating average cost of acceptance for each payment method, and the setting out of costs in percentage terms, as opposed to fixed payments.
The RBA has also drafted a new framework that will see American Express companion cards brought under the same regulations as those of Visa and MasterCard and the reduction of the weighted average benchmarks for debit cards reduced from 12¢ to 8¢.
Australian Retailers Association Executive Director and Chair of the Australian Merchant Payments Forum, Russell Zimmerman, says the proposed standards on surcharging, co-branded cards and interchange fees will benefit retailers and consumers across the board and lead to significant cost savings for retailers.
“The ARA is especially satisfied to see that our position on American Express companion cards has been heeded,” he said. “The proposed modifications to credit card interchange standards, whereby co-branded American Express cards are subject to the same interchange fee regulation as MasterCard and Visa, is perfectly in line with what the ARA has been pushing for.
“We’re incredibly pleased to see that these cards will be brought under regulation to provide an equal footing for all systems and will eliminate the additional costs retailers are forced to bear for acceptance of these currently unregulated cards.”
Mr Zimmerman added that the 80-basis-point maximum proposed for interchange rates will result in lower costs for merchants when accepting premium style cards.
“With this reduction, the majority of retailers will no longer have a need to surcharge for scheme credit card purchases,” he said. “This is an incredibly positive outcome for the retail sector, in particular smaller retailers who will benefit from lower interchange fees on premium cards.”
The RBA is seeking views on the draft surcharging and interchange standards as well as on other issues discussed in the Consultation Paper. Formal written submissions on these issues are requested by February 3, 2016.