The scare campaign on interchange fees doesn’t add up
The RBA’s push to cut card fees isn’t a threat to security or innovation. it’s a long overdue step to ease costs for small business and boost competition.
There’s a lot of noise in the media right now around payment reforms, and most of it is coming from the big end of town. The banks and global card networks are dominating headlines with claims that the Reserve Bank of Australia’s proposed reforms will harm security, make credit cards more expensive and somehow stifle innovation.
It’s a familiar playbook: muddy the waters and shift focus in order to protect margins.
What’s actually happening is that the RBA is trying to modernise a system that too often serves banks and card networks, not small businesses. Instead of addressing the real problem — interchange and card network fees that are too high, too opaque and unfair — the big players only seem interested in running interference.
Let’s be clear about what these reforms really mean. Interchange reform is not radical, it’s reasonable. Other regions, including the UK and EU, have cut interchange fee caps further, and the outcomes are clear. Small business fees went down, competition increased and there was no impact on security or innovation. The payments system didn’t melt down.
