The Australian Association of Convenience Stores (AACS) has welcomed the Federal Government’s plan to cut debit card surcharges but says more can be done.
The Federal Government says it plans to ban debit card surcharges from 2026, subject to a review underway by the RBA, along with $2.1 million of new funding for the ACCC to tackle excessive card fees, crack down on illegal and unfair surcharging prices, increase education, and conduct compliance activities while the RBA’s review is underway.
Theo Foukkare, CEO of AACS, said any ban on surcharging would only be supported if the relevant reform to the payments system is implemented to slash card fees levied on retailers.
“Retailers have seen their merchant fees explode over the last few years, while the profits of the big banks have continued to balloon.
“While major retailers like Coles and Woolworths don’t apply surcharges because they are on strategic rates with the banks, small businesses are often forced to pass on the cost of the electronic payment system to shoppers just to keep their head above water.
“As a minimum, we are calling for a government mandate on Least Cost Routing and for debit fees to be separated from credit fees.”
Foukkare urged the Federal Government to go further with its planned ban and called on the Reserve Bank of Australia (RBA) to introduce urgent reforms that overhaul the current payments system so that small businesses can compete on an even playing field with large businesses.
“For too long, the big banks and overseas payments providers have continued to benefit from their complicated and confusing fees that they charge businesses – they quite literally take hard earned money from cash-strapped Aussies in a cost-of-living crisis for doing nothing.
“Retailers have been demonised for these surcharges – with the banks and overseas payment providers pedalling a false narrative that shopkeepers pocket the cash, when it’s simply not true. They are simply passing on their bank fees.”
Foukkare says retailers can’t wait for the proposed timeline of 2026 and urged the Federal Government to enact its plan now.
“Australia is in the throes of a cost-of-living crisis and a cost of doing business crisis, we can’t wait until January 2026 for these changes to be implemented – we need action now.”
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These charges should be dropped or suspended whilst this is being investigated