ABA CEO Simon Birmingham transcript of interview on ABC Sunshine Coast with Tim Wong-See

E&OE
Radio Interview
ABC Sunshine Coast
3 September 2026.

Topics: Upcoming card surcharge ban

Tim Wong-See: Now, from the start of next month, credit card surcharge fees are being abolished following a recommendation from the Reserve Bank of Australia. So, all those extra charges that annoy a lot of you when it comes to tap and pay will be gone. But that cost, although it’s a small one per transaction, has to go somewhere. So, where will it all end up? A big response from you on this yesterday, particularly around questions about automatic payments that you might have in place already. What’s going to happen with those after the first of October?

Simon Birmingham is the CEO of the Australian Banking Association. He has extensive experience in the financial sector, including working with ANZ, he was a Senator for nearly 20 years and also served as a Finance Minister in the Morrison Government, and he joins us. Thanks for coming on Simon.

Simon Birmingham: Good morning, Tim. Good to be with you.

Tim Wong-See: These fees, in the first place, can you explain what they’re actually for? Is this for providers paying the people who are supplying these machines, or where does this all come back to?

Simon Birmingham: The Reserve Bank has estimated that around 10 to 15 per cent of Australian businesses have applied surcharges over recent years. It’s hard to get a precise estimate, there is no formal process by which businesses go through to decide to apply those surcharge costs. It’s an individual choice and many consumers indeed find that part of the frustration, when they go to buy a cup of coffee or pay for a good or service, they are quoted a price and then discover that there is sometimes less than 1 per cent, sometimes more than 1 per cent added to the cost of that price as a result of a business making an individual choice to surcharge. What has occurred now is that the Reserve Bank has changed some rules that enable the card schemes – Visa, Mastercard, Amex – to ban that practice of surcharging, as is the case in most of the rest of the world.

Tim Wong-See: Now, do you think a lot of this boils down to the fact that, as you talked about there, sometimes some of these charges by businesses might be a bit arbitrary? It’s not exactly clear where they’re coming from, hence the recommendation here from the RBA.

Simon Birmingham: I think the frustration for consumers is that it’s not part of the quoted price upfront. It is uncertain, and indeed, that is part of the Government and the RBA’s thinking in seeking to change the rules in Australia so that those card schemes can enforce sort of common standards as they do around the rest of the world. As a banking industry, we frankly often cop the blame for surcharging and have been happy to see surcharging banned and this practice phased out so that customers get and pay the price that they are quoted when buying a good, rather than the shock of an extra few cents or dollars on their bill at the end.

Tim Wong-See: Now it will differ from business to business, but generally with those machines that people carry around with them that offer that payment, is it an upfront cost to that business to buy that machine from the payment provider generally, or is it a rental, ongoing cost? Hence, the need to pass that on to customers in the form of their surcharge. Is there feedback that you’ve received up until this point as to how that works?

Simon Birmingham: So, there are a lot of different models that apply in terms of merchants, small businesses, and other businesses ‘acquiring’, as the language goes, payment services. Those models sometimes go through banks, who do provide some of those terminals, but not all of them. People would nowadays be familiar with the little white boxes, the Square terminals that are used by some, some download nowadays apps and software that they can apply on their phones for very small or micro businesses. So, a lot of different models there in terms of how people do it, and costs are equally variable in that regard. So, it really is a case for businesses to price in, just as there are costs with physically handling cash, having people physically go to the bank and undertake those deposits or withdrawals, having floats available, and so forth. There are costs attached to any payment form and it’s for businesses to manage those.

One of the things the Reserve Bank did in its decision was to significantly cut what are known as interchange fees that are charged by banks as part of the payments process, and that is estimated to reduce or take around $600 million out of the revenue that banks will receive. So small businesses should be expecting to see those savings passed through in relation to the costs of processing payments.

Tim Wong-See: So, I think the changes you talk about, the interchange cap fees, this is coming in from April next year?

Simon Birmingham: So, the changes to interchange…

Tim Wong-See: Or the cap, I should say?

Simon Birmingham: Yeah, that’s right. So that’s the reduction in the cap and rates, therefore, of interchange – as I say, some $600 million of savings that should flow through to businesses across the country. That’s certainly the expectation of banks. Now there are other players, these card schemes themselves – Visa, Mastercard, Amex – apply separate fees. It’s a complex payment system the way it operates, and indeed those businesses like Square that I mentioned also apply different fees. But the bank fees are certainly coming down, and coming down in a large sum, to ensure that businesses should be able to adjust their pricing, but also absorb the loss of surcharging in many cases.

Tim Wong-See: All right, I appreciate your time, Simon. Thanks for coming on.

Simon Birmingham: Thanks, Tim. My pleasure.

Ends

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