Disputing the charge
The submissions to the RBA’s payments review offer a wide range of opinions on surcharging — but critical issues remain overlooked.
At least the Reserve Bank can say its review of retail payments regulation attracted a diversity of views on surcharging.
Ban surcharging, expand surcharging, impose caps on payment schemes, recognise that fees support innovation and security — there’s no obvious, economically rational path forward, even leaving aside vested interests.
The challenge largely stems from the nature of payment systems as networks, where network effects are notoriously difficult to quantify. There are costs and benefits for all parties. Merchants pay for accepting electronic payments, but they also benefit from broader customer reach, convenience, better security and higher average sales.
The anomaly is that cash — often assumed to be cheaper — costs merchants more when considering security, access, administration and opportunity. Yet it is not mentioned at all in this review.
