This latest call from Tyro comes in response to the RBA’s release last week of a consultation paper revealing draft changes to the standards on interchange fees it is considering.
“While the changes proposed by the RBA are encouraging more needs to be done. The proposals are encouraging but just don’t go far enough,” says Tyro CEO Jost Stollmann.
According to Tyro – which has repeatedly banged the drum and called for the abolition of interchange fees - Australians are missing out on hundreds of millions of dollars worth of savings because of “unnecessary” card payment fees.
“As Australians embark on their $18 billion Christmas spending blitz, changes proposed by the RBA to unnecessary card payment transaction fees mean that they would collectively save an estimated $200 million a year at the cash register,” Stollmann claims.
But, Stollmann also claims that the proposed new regulation falls short of the estimated $750 million it could have saved consumers and retailers, if the RBA had followed the European Union lead with a hard cap of 0.3% on interchange fees.
Stollmann says the Reserve Bank’s release last week of its consultation paper proposed draft changes, including:
• A hard cap of 0.8% on interchange fees and the inclusion of international cards in calculating the average cap of 0.5% will save Australian businesses and consumers an estimated $100 million
• With the average cap of 0.5% will save another estimated $100 million through elimination of the creep between reviews
• The inclusion of American Express companion charge cards under the average cap of 0.5% and the hard cap of 0.8% will add further savings
“This is a step in the right direction, however, the proposed changes to the card interchange fee are essentially invisible to the average customer and small business. The only real option is to ban interchange fees altogether.”
Stollmann claims lower income Australians will still be subsidising the spending habits of Australia’s wealthiest to the tune of hundreds of million dollars a year, “money that could otherwise be spent on gifts under the Christmas tree for friends and family”.
“Why should lower income Australians and small businesses continue to fund the, although now, somewhat less generous reward programs of platinum and super premium cards for the wealthy? The RBA needs to go the whole way and abolish the fees completely.
“Australia is well behind the eight ball, with New Zealand, Canada and eight other EU members having very low or zero debit interchange fees.”
Tyro Table: Premium and entry level card charges and 'subsidies' :