The Australian Retailers Association (ARA) has come out in support of the Reserve Bank of Australia’s (RBA) proposed new standards for Australian card payment systems, with retailers to see a reduction in their cost of doing business should the draft changes be implemented.
ARA Executive Director and Chair of the Australian Merchant Payments Forum (AMPF), Russell Zimmerman, said 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 supportive of the RBA’s stance on surcharging and will be pleased to see greater clarity around what can be surcharged and what cannot be surcharged by retailers should these proposals be enacted.
Proposed surcharging frameworks by the RBA include more defined guidelines around card acceptance costs, statements by 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 new framework that will see American Express companion cards brought under the same regulations as that of Visa and MasterCard, and the reduction of the weighted average benchmarks for debit cards reduced from 12 cents to eight cents.
“The ARA is especially satisfied to see that our position on American Express companion cards has been heeded. 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,” said Zimmerman.
“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.
“The 80 basis points 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,” Zimmerman 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 ARA will now review the details of the RBA’s proposed standards and consult with both the RBA and Government on the implementation and particulars of these to ensure the best outcome for Australian retailers,” he said.