Fee for all
The government’s plan to ban surcharges on debit transactions could rattle the business models of Australia's legion of payments fintechs.
With the cost-of-living crisis stinging at the polls, the government’s move to clamp down on surcharging may or may not be smart politics. However, one thing is clear: it will have a significant impact on the fastest-growing segment of the fintech sector — payments tech startups.
On Tuesday, the government flagged plans to ban surcharges on debit transactions, which are increasingly replacing cash, as the Reserve Bank launched its “Review of Merchant Card Payment Costs and Surcharging” and called for submissions on the issue.
“This is all about getting a better deal for consumers, reducing costs for small businesses and promoting a more competitive payments system,” Treasurer Jim Chalmers said in his release announcing the move.
Whether this change will be the win for smaller merchants and consumers it is being portrayed as remains to be seen, but a growing number of fintechs will be watching closely for its effects on their businesses.
