Simon Birmingham, the new Chief Executive Officer of the Australian Banking Association (ABA), says Australia should move quickly to ban card surcharges but proceed carefully on interchange fees to avoid giving multinational tech companies a windfall.
ABA Backs Surcharge Ban
Birmingham, a former senior Liberal government minister, told Sky News Business that the Reserve Bank of Australia’s draft plan to outlaw surcharges is “long overdue.” About 10% of Australian businesses still impose extra fees, which he said confuse customers and unfairly shift blame onto banks.
“Consumers want clear, upfront pricing at the checkout,” Birmingham said. “Banks don’t much like getting the blame for surcharges that are usually set by merchants.”
The ABA’s submission supported a full ban on surcharges, arguing that it would end confusion and frustration for shoppers.
Concerns Over Interchange Fees
At the same time, Birmingham warned against further cuts to interchange fees — charges paid between banks for card transactions. Australia already has some of the lowest interchange rates globally.
Deeper reductions, he said, could push banks to recover costs elsewhere: through higher annual card fees, shorter interest-free periods, or scaling back rewards programs that many households and small business owners rely on to manage cash flow.
The ABA recommended instead “measured, highly targeted” reforms, such as special small business rates, rather than sweeping changes that could destabilize the payments system.
Scrutiny of Foreign Tech Giants
Birmingham also called for a “whole-of-system review” that would examine the role of Apple Pay, Google Pay, and AMEX. These multinational firms now control a significant share of mobile transactions and have only recently been brought under Reserve Bank oversight following Senate legislation.
“What we can’t have,” Birmingham said, “is a situation where multinational tech firms are empowered, while sovereign Australian companies find themselves squeezed.”
Digital Growth Vs. Cash Reliance
Australians are rapidly shifting toward mobile and digital payments. RBA and ABS figures show more than four billion mobile wallet transactions were completed last year.
But cash is still vital for about 1.5 million Australians, many of them older or on lower incomes. The share of cash in household payments has plunged from 70% in 2007 to just 13% in 2022, before stabilizing. Birmingham said policymakers must ensure cash remains available for those who choose or need it.
“While many consumers find mobile and card payments faster and more convenient, a growing group consciously choose cash for privacy, control, or access reasons,” he said.
Keeping Cash Moving
Birmingham pointed to ongoing challenges in Australia’s cash distribution system, particularly with major cash-in-transit provider Armaguard. He said banks are working with stakeholders to maintain reliable nationwide logistics.
Balancing Reform
The ABA is urging government and the RBA to quickly implement a surcharge ban, while adopting a cautious, phased approach to interchange reforms.
With digital transformation reshaping payments, Birmingham said the goal must be to balance innovation, fairness, and accessibility. “Reforms should protect consumers, support small business, and ensure the system works for everyone.”
