Doorstop interview on surcharging 

Journalist: Maybe if we start off just with these merchant fees and card surcharges, I guess, why are they even necessary to begin with?

Anna Bligh: Every time you make a purchase with a card and that payment goes to the person it’s supposed to go to, it’s gone over a set of rails. They’re invisible. You can’t see them. But that doesn’t mean that they’re free. Banks have to maintain those systems so that they’re safe. So, your payment goes where you want it to go, and there’s a cost to that, just like there is to put pipes in to carry water, to put in electricity lines to carry electricity. A lot of these things, you can’t see them, but they do cost money to upgrade and maintain.

Journalist: I guess the one of the analogies that’s been made today is that text messages, they used to be 25 cents each. Now they’re free because, I guess the infrastructure is already there. Why would these car surcharges be any different.

Anna Bligh: We have seen card surcharges reduce over the last decade, and I expect that they’ll continue to go down. But there is a cost to maintaining the rails that our payments run on. We need to keep them safe. You don’t want your payment to go to the wrong person. You don’t want your payment to get lost somewhere along the line. So, it’s an important part of doing business. Small businesses and others have to pay for their electricity, their telephone, their wages, their rent, and ensuring the payment system gets to their business is part of those normal costs of a business.

Journalist: And while we’re talking about those normal costs. So, if it’s not going to be passed on to customers in the form of a surcharge, what are the options there for small businesses?

Anna Bligh: Every time a small business decides how much they’re going to charge for their product, they take into account, what is my electricity cost, what’s my rent cost, what do my wages cost. And then they look at a margin above that having a secure payment system to ensure your customers can pay you is as important and as a normal part of doing business as your telephone and your electricity, and it should be factored into the cost of doing business.

Journalist: The RBA has moved forward their review into these surcharges. What do you anticipate will happen over the next 12 to 18 months in this space? Does the ABA anticipate there will be changes to the surcharges?

Anna Bligh: There’s no doubt that we’ve seen an increase in the number of businesses that are putting a surcharge on and understandably I think customers, customers want to know what the what their product costs before they get to the cash register, not get stung by something they didn’t expect when they go to pay. So, I think there’s a very good question about what is the future of surcharging? Why are businesses allowed to surcharge for their payment system, but not for their electricity, their water, their rent, or any other cost of doing business. I think it’s a good question. I look forward to the review from the Reserve Bank. It’s what I’m pretty sure Australians are going to have a strong opinion on.

Journalist: Do you anticipatethatmaybe the surcharging, while it may remain, it might just be, you know, there might be limits, or it might be reduced.

Anna Bligh: There are already strict rules around how a business can surcharge. I certainly observe businesses surcharging outside of those rules. I would like to think that as the Reserve Bank does its review on this issue, that customers will bring their experience to that review. And yes, I think there’s a very big question mark over the future of surcharging.

Ends

Anna Bligh