ABA CEO interview with 2GB’s Ben Fordham on the end of card surcharging

E&OE
Radio Interview
Interview on 2GB Breakfast
7 October 2026

Topics: Card surcharging

Ben Fordham: Simon Birmingham is the CEO of the Australian Banking Association. He’s with us live in the 2GB breakfast studio. Simon, good morning.

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

Ben Fordham: So, if it’s not tenable for the ATO, why is it for businesses?

Simon Birmingham: Well, Ben, it’s a choice indeed for businesses, but I fully get this is pretty tough for businesses. Lots of small businesses are facing cost hikes right across the board. Inflation doesn’t just affect households. It means that for businesses, the cost of their electricity, the cost of their rent, the cost of their foods or other inputs, and the cost of the wages of their staff have all gone up. And it’s unsurprising that many are taking this opportunity, the first of October, when they couldn’t surcharge, to say, well we’re going to do some price adjustments, we’ll incorporate the surcharge and also deal with some of those other inflationary pressures.

Ben Fordham: You can see why people are upset, though, when the tax office says it’s not tenable for the ATO to absorb the costs associated with accepting credit cards. So, if it’s not good for them, why would Anthony Albanese or anyone be expecting that businesses are able to absorb those costs?

Simon Birmingham: Yeah, and obviously, when you’re paying your tax, you don’t have a choice, you have to pay your tax. I have to pay my tax, and small businesses have to pay their tax. And, so the tax office is able to say pretty clearly, these are the payment options available to you and expect that people will comply because that’s the law.

Ben Fordham: Who should be paying for this? Who should be absorbing these costs?

Simon Birmingham: Look, the costs themselves are at one level a cost of doing business. Any form of taking a payment comes with a cost. You take cash, sure there may not be a bank charge or otherwise that comes with it, but ultimately the cost of reconciling that cash, of banking that cash: it’s a cost in terms of time and effort that doesn’t come with card payments because all of that is automatically reconciled nowadays with the type of software that businesses use. So, there’s a cost in terms of time pressure versus fees. Fees should have come down. That’s what the Reserve Bank said would flow through to businesses because banks actually have taken, I know nobody ever has any sympathy for banks, they’re not asking for it, but banks have taken a haircut through this. The Reserve Bank cut what was called the interchange fees from banks that, on card payments, could be 0.8 per cent, which have now been cut down to a maximum of 0.3 per cent. That’s between $600 and $900 million less that banks are getting as a result of this.

Ben Fordham: Why don’t the credit card companies pay for this? I mean, Visa and Mastercard make billions of dollars. Why don’t they absorb the cost?

Simon Birmingham: And that’s been our concern all along. When the Reserve Bank was doing this review, we said, well it’s one thing to look at the bank fees, but they are only part of it. Those card schemes, Visa and Mastercard, take a cut. Increasingly now, as we all double-click our iPhones, Apple gets to take its cut. That’s not even publicly disclosed what it is that Apple takes, because they shroud it in confidentiality. So, we really want the Reserve Bank to use some new legal powers they’ve got to look at all of those global multinationals who are taking more out of the Australian payments system. And I tell you what, last week, when the tax office did release its corporate taxpayer data, the banks were all at the top of the list in terms of paying tax. You’d struggle to find those corporate multinationals near that top of the list.

Ben Fordham: Can’t we pay in some way through a QR code or something like that, where you can you know – I’m told that this happens in other countries where you take a photo on your phone or use the QR code and it processes the payment, and there’s no surcharge attached.

Simon Birmingham: So, there are different payment options in it. I expect that obviously a lot of, I imagine, tradies and others dealing in large sums will be a bit like the tax office, and they’ll say, well, we’re not going to take credit cards anymore. We want you to use direct debit facilities and those sorts of payments that don’t come with other fees. Certainly, your PayTo type systems can involve QR code-type systems. I believe some businesses are trialling them. They’ve had much more take-up in other countries than Australia, where people have stuck with traditional card payments. But this could be a tipping point.

Ben Fordham: And if people are staying away from credit cards and moving towards cash, there’s going to be more cash in the economy.

Simon Birmingham: Well, there’s potential indeed to see that. You know, certainly businesses are entitled to offer cash discounts now. So, what the Reserve Bank did in changing the rules means you can’t apply a card surcharge, but you can offer a cash discount. That’s again up to businesses how they do that, but it could create a little uptick back into cash. We’ve seen cash use, although it’s plummeted in the last decade and only accounts for about 15 per cent of transactions nowadays, seem to have stabilised in the last couple of years at around that 15 per cent mark.

Ben Fordham: We’re chatting to Simon Birmingham. You’ll remember he was in Parliament for many years. These days, the boss of the Australian Banking Association. What should come out of this meeting today, and more broadly, what would you say to the Prime Minister about fixing this? Because he was talking about prices going down and they’ve gone up. I mean, he’s got it spectacularly wrong.

Simon Birmingham: Well, look, I think in terms of the tax office, they’ve got to work through with small business how they give them at the very least decent lead time and some certainty around how this is going to transition. If their decision long term is not to accept cards, well, that’s fine. But I think what has angered many was a lack of notice, and that short lead time is a problem. Longer term for the entire system, the Prime Minister’s got to make sure that the Reserve Bank acts as fast as it can to review all of those other costs: the card scheme fees, what are called three-party schemes like Amex and others in their role, the digital wallets, and to actually provide competition and access in the digital wallet market. You know, in the European Union, they’ve passed laws so that banks and others can develop their own digital wallets and aren’t tied into having to use the Apple technology that in Australia is now just seeing more and more of a share of those card fees going offshore into Apple’s pockets rather than potentially being applied in homegrown technologies and capabilities.

Ben Fordham: This is looking more and more like a thought bubble every day. One of those ideas that sounds good when you’re having a look at the executive summary, but the moment you put it into practice, it goes pear-shaped.

Simon Birmingham: Look, indeed, and I kind of get it that all of us, I think, as consumers, were irritated when you paid for your six-dollar cup of coffee and looked at your credit card statement and saw $6.18 charged to us. Where did that extra 18 cents come from? So, it’s long been an irritant and a bugbear, but because it hasn’t been comprehensively tackled into looking at all the different fees and charges, small businesses are still facing and coping with the bulk of those fees and charges from all of the other sources. The bank ones might have come down, but our concern was always that those bank ones would come down, and others would just increase theirs in return.

Ben Fordham: You would have heard a lot of people saying, “Where are the banks in all of this?” And that the banks should be paying, they should be absorbing these costs. But the credit card companies really, this is their business, isn’t it? This is their whole business model based on these transactions, and they’re the ones making billions of dollars out of all of these transactions.

Simon Birmingham: And the banks are overwhelmingly the ones that are Australian, that invest into our payment systems. We all kind of take the infrastructure for granted, but behind all of that clicking and tapping that goes on when you make a payment is basically like a highway system and a network of technology that actually makes all of those payments occur and reconciles it, and it’s got to be as fraud-proof as it can be, as cyber resilient as it can be. All of those security parts, which ultimately Australia’s banks build and pay for and spend billions of dollars on. And so, recognising that there are other big fee charges in this system is critical, and that’s where we’ve got to see the Reserve Bank and the government take those next steps.

Ben Fordham: Well, I think we’ve seen in the last week or so that this is one of these issues that’s really cut through. John Howard used to talk about a barbecue stopper, one of those issues that would stop a barbecue, and everyone would be talking about it. Everyone’s talking about this one, and it’s blowing up in Anthony Albanese’s face.

Simon Birmingham: A lot of issues that I deal with now as the Banking Association CEO are pretty dry, and I don’t get many people raising them with me, interest rates and so on obviously being different. But this is definitely one where people have raised it with me in the last week or two. It’s hitting through at the small business level in particular, small businesses are doing it tough in Australia and right around the world, frankly, with the inflationary pressures everywhere. But we’ve got to see the next steps happen, and they’ve got to act as quickly as they can, because right across many parts of our system, we’re seeing those big multinational companies who are taking growing profits out of Australia. They don’t pay the same degree of tax, and we just want to see regulatory equivalence in the way in which they are treated alongside Australian businesses.

Ben Fordham: We appreciate your time this morning. Thanks so much for dropping in.

Simon Birmingham: Thanks, Ben. My pleasure.

Ends