ABA CEO interview with FiveAA Adelaide’s Stacey Lee and Jonno Edwards on the card surcharging ban

E&OE
Radio Interview
Interview on FiveAA Adelaide
1 October 2026

Topics: Card surcharging ban

Stacey Lee: Well, speaking of budgets, everyone’s are tight at the moment and they might get a little bit tighter from today because card surcharges have come to an end. It’s the first of October. It’s a deadline on a whole lot of things, including card surcharges. Simon Birmingham is the CEO of the Australian Banking Association. Good morning to you, Birmo.

Simon Birmingham: Good morning, Stacey, Jonno and listeners.

Stacey Lee: I think a lot of people were expecting that the banks would have to absorb this cost from the surcharges, but in reality, banks are still passing on the cost of using card facilities, and it means that that expense will probably just get passed on to us as consumers. Is this fair?

Simon Birmingham: Well, Stacey, banks are taking a big haircut in terms of card fees as a result of this decision. The Reserve Bank did two things in in bringing this forward. One was to say surcharging – by what is estimated to be about one in six businesses – should come to an end. The other was to say that the cap on how much banks can charge as fees within that would be reduced from 0.8 per cent down to 0.3 per cent. That’s estimated to be a cut of between six and some are putting up to $900 million in in terms of fees that flow through to Australian banks, so it is a significant cut in terms of those bank fees occurring at the same time.

Stacey Lee: But some banks have already started to work out ways to try and claw some of the money back. I mean, anyone who has a credit card that they earn frequent flyer points through will notice a drop in the amount of money or their redemption for points, and the banks are saying, “Well, we need to make our money back somehow, and this is how we’re going to do it.” So, you know, they might have been capped on the fees that they can charge, but they’re going to work out a way to make their money back in a different way.

Simon Birmingham: Certainly, the Reserve Bank, when they released their discussion papers talking about this, and were very clear on the way through that one of the things they wanted to tackle was what they saw as a cross subsidisation. That essentially everyone, through the charges applying at the at the transaction point, was paying towards the rewards programs that are more generous on some cards than others, and so the Reserve Bank was pretty clear they wanted to end that. And if a card is to have more generous rewards programs or benefits attached to it, that that should be a more direct cost to those card holders, not something that everyone pays when they tap their card, even a card without a rewards program, at the point of buying their cup of coffee or their weekly supermarket shopping.

Jonno Edwards: Birmo, there’s been a lot of small business owners take to social media, though you know, crying that this is just another whack towards them. I know you’re representing the banks, but surely somewhere on middle ground, this is just going to hurt the small business owners once again.

Simon Birmingham: Yeah, Jonno this is an adjustment for small businesses. Now, Australia was quite out of whack and out of step with the rest of the world. We’re one of the few places to allow that type of surcharging that really has been an irritant for many consumers. That that they are quoted six bucks for a cup of coffee but then look at their card afterwards or their statement and see they’ve been charged $6.18 as an additional whack has been put on there. So those small businesses who were choosing to surcharge should see a reduction in terms of their bank fees, but nonetheless, particularly if they were surcharging even above the level of what those bank fees were, now need to think about what that means for their pricing, and we’re very cognisant of the fact that they, along with every Australian are facing the high inflationary environment we’ve got at present, and that makes it tough and difficult and it does mean that that some may choose to put their charges up or fees up a little.

Ends

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