ABA CEO Simon Birmingham transcript of interview on Sky News Business with Ross Greenwood

E&OE
TV Interview
Sky News Business with Ross Greenwood
Wednesday, 17 September 2025

Topics: Banning of card surcharging; Interchange fees

Ross Greenwood (Host): Simon Birmingham recently was appointed Chief Executive of the Australian Banking Association and he joins me now. Simon, good to chat. You’ve been in this studio many, many times before of course, so just good to have you on the program.

Simon Birmingham (Guest): Great to be here Ross.

Ross Greenwood: I just want to go here so you agree with the banning of surcharges, but something’s got to happen differently in regard to those interchange fees?

Simon Birmingham: Ross, that’s right. Look, the Albanese government was right to request for the ban on surcharges, and we absolutely respect the Reserve Bank and the work they’ve done to recommend a ban on surcharges across credit cards and debit cards. Consumers are fed up of not knowing what they’re paying, and frankly, banks don’t much like getting the blame for it when actually only around 10 per cent of businesses apply those surcharges, but it irritates the bejesus out of people when they are applied.

However, the Reserve Bank then added on a range of other more technical recommendations to its draft report and we think on those things, they need to go back to the drawing board. We’ve proposed some alternatives, and alternatives that we think can do a better deal for small business, which we respect the Reserve Bank wants to look out for here, can also not create an advantage for foreign multinational tech companies who are becoming an increasing part of the payments system.

Ross Greenwood: Can I jump in there? That’s the key, isn’t it? Because it’s Apple Pay, it’s Google. It’s these types of things that are now starting to emerge that are not the subject of many of those interchange fees. And that’s the reason why it’s not a level-playing field.

Simon Birmingham: Australians don’t need to understand what interchange fees are to know that people are pulling their phone out to pay more often. So, absolutely, Apple pay, Google pay, elsewhere in the system AMEX, potential big beneficiaries out of this. And part of the problem is that the RBA was asked to do this work and to start the surcharge ban before they had powers to look at these foreign tech companies. Now, actually, in the last two weeks, the Senate has finally passed legislation to give the RBA those powers. So, our urging is for the Reserve Bank not to only do the bit of the system that hurts Australian sovereignty, Australian banks and their capabilities to invest in the payment system, but to take the time to do a comprehensive piece of work. So, ban surcharging now, come up with targeted proposals to support small businesses in the banning of surcharging, but don’t take the big sledgehammer to interchange fees. Instead actually do a comprehensive piece of work, because otherwise you’re going to see that potentially half or even more of what is paid in those fees is all going straight off those foreign platforms, while Australian banks are expected to deal with fighting scams and fraud and other things that are important parts of keeping our payment systems safe.

Ross Greenwood: I was going to ask you about that because it is a fallacy to say that if that money is not there, that banks won’t have the money to go and pursue fraud and scams or whatever. That’s a part and parcel of what they do these days. But the reality is, the banks would make a bit less than what they currently do and wouldn’t be as competitive as compared with some of those other payment systems.

Simon Birmingham: Well, there’s the competition aspect and indeed do we end up seeing more going down the pathway of an AMEX platform, which, again, foreign owned, foreign multinational, will see the profits and the funds funnelled off elsewhere. Or, of course, there’s the Reserve Bank in their own reports and statements indicate that they think some of the interchange fee cuts should be passed banks direct to card holders. What that means is higher annual fees, shorter interest-free periods.

Ross Greenwood: Well, it almost replaces the surcharge but the surcharge dressed up a different way?

Simon Birmingham: And in a way that that I suspect many consumers don’t want. And take particularly the interest free periods. For many households, that’s how they manage their cash flow. For many small businesses, indeed around 2 million corporate card holders, those in the commercial card sector, they use this critically as a part of their cash flow operations. And what you’ve got here is a proposal from the Reserve Bank that in those commercial cards actually isn’t seen really anywhere else in the world. They’re not regulated in this sort of way, and again, we think that’s part of the reason why take a breath – can do some things that target the support for small business while banning surcharges. But then take a comprehensive review that looks at your Apple Pay. your Google Pay, Buy-Now, Pay-Later schemes, all of those things that finally the RBA has the power to take a look at too.

Ross Greenwood: And there’s one other aspect of this, and that is cash. Because quite clearly cash is now being more expensive, becoming more expensive to manage and handle as less of it is being used. And the reality is that somebody, banks, whomever, who deals with cash, have to actually manage the cost of that cash. Otherwise, really, we saw what happened with Armaguard, basically having to be propped up by industry. So, the fact of the matter is, this is only going to get worse. A bit like the post office with its stamps, it’s not going to get better.

Simon Birmingham: We’re still working through the long-term solution for cash-in-transit, for working with Armaguard, and that’s a really important piece of work we’re trying to do with them to come up with how do we keep necessary cash moving around the economy. But you take it right back to a small business level. For many businesses now, they are making the choice that it’s just much simpler for all of their time, their hassle, their accountability and accounting methods to run through a credit card process where it’s all automated.

Ross Greenwood: Well, you know that. You see that in stores these days, we don’t accept cash. We’ll only take your card, or we’ll only take your phone.

Simon Birmingham: And you’ve got to respect that decision by small businesses, because it’s about a time and effort factor and times money when you’re running a small business, and if they’re having to spend money trying to account for very small volumes of cash and spend with the safety and security issues that come with that, compared with cards.

Ross Greenwood: I’ve only got a couple of seconds. Here’s one issue, the banks are big. They make a lot of money. Everybody recognises that. Do you think there’s a perception in the community that the banks should be expected just to pick up the tab here?

Simon Birmingham: That perception is always kind of there. But let me put it this way. In this case, Australia’s banks might be big, but when it comes to their leverage with dealing with Apple, they’re actually pretty small. And what we can’t have is a situation where global foreign multinationals are empowered, while sovereign Australian companies that we rely upon find that they are ever squeezed.

Ross Greenwood: Simon Birmingham, great to have you on the program.

Ends