RBA Review of Merchant Card Payment Costs and Surcharging: Issues Paper

In December 2024, we responded to the Issues Paper for the Reserve Bank of Australia’s (RBA’s) Review of Merchant Card Payment Costs and Surcharging.

In our submission, we noted that while we understood that merchant payment costs and surcharging have received increased public attention over the past year, much of the evidence presented in the Issues Paper suggested that Australia's payments system was generally functioning well.

In this context, our submission highlighted several key considerations from an industry perspective that we hoped would inform the RBA’s assessment of the policy issues outlined in the Review. These included:

• The importance of considering the payments ecosystem holistically, rather than making changes that would only apply to certain payments systems or participants in isolation and potentially create competitive distortions.
   
• The need for the regulatory responses being considered to be supported by detailed quantitative research that considers the distribution of both costs and benefits across the payments ecosystem and its end-users.
   
• The importance of taking a broader view of efficiency that considers not just costs, but also quality, security, innovation, and the long-term sustainability of the payments ecosystem.
   
• The risk that certain regulatory measures and increased regulatory complexity could undermine policy effectiveness through unintended behavioural responses.
   
• The value of maintaining flexibility in pricing and business models to enable continued innovation and competition across the payments ecosystem, and to better meet the needs of merchants.
   
• The importance of better stakeholder understanding about how the payments system operates and the value it provides. 

Our submission focused on key considerations from an industry-wide perspective that should inform the evaluation of potential regulatory responses.

AusPayNet’s submission is available below.