New research has found 56 per cent of Aussies don’t oppose businesses raising prices to cover lost revenue from card surcharges.
It comes after the Reserve Bank of Australia proposed to ban surcharges on debit and credit cards at the checkout, a move which could save households $1.2 billion a year.
The hospitality industry has expressed concern that banks may maintain the same fees, leaving restaurant and café owners to weather the fees.
The research from Money.com.au surveyed more than 1000 Australians, with 56 per cent saying it would be reasonable for businesses to raise prices to offset card-processing costs.
The survey also found 35 per cent think price increases are only fair if businesses are transparent about the extra cost, while 21 per cent say any rise should be reasonable and not cross into price gouging.
In contrast, 44 per cent of Australians say businesses shouldn’t raise prices to cover card-payment costs and should absorb those expenses instead.
Younger Australians in particular were less opposed to businesses passing on card costs, with 68 per cent of Millennials and 65 per cent of Gen Z saying it’s fair, provided it’s transparent and reasonable, compared with 53 per cent of Gen X and just 45 per cent of Baby Boomers.
Money.com.au Finance Expert Sean Callery says consumers will tolerate some price increases, but only on fair terms.
“Whatever form the RBA’s changes take, businesses will still have to pay banks for payment services,” says Callery.
“The big question is whether they will wear those costs or build them into higher prices for consumers in place of a card surcharge at checkout.
“It’s hard to think that restaurants, cafés, pubs, and small shops and businesses would simply absorb those costs when their margins are already so tight.”
He says consumers want fairness and transparency.
“They’re prepared to accept a small, reasonable price increase to their morning coffee or weekend dinner, but they don’t want to be taken by surprise or stung with price hikes that go beyond a business’s operating costs, which would go against the spirit of the RBA’s reforms.”
Money.com.au says under the proposed changes businesses will still have to pay merchant fees to accept card payments.
While the RBA is proposing to reduce interchange fees, these are only one part of that cost, alongside scheme fees and the provider’s margin, says Money.com.au
“Cutting interchange fees won’t necessarily lower merchant fees unless banks pass the savings on to businesses.”
For businesses that currently add a card surcharge, a 1.5 per cent fee that is passed on to customers would become a 1.5 per cent fee they have to absorb or bake into everyday prices to recoup their costs.
The RBA will issue its final decision on the reforms by the end of the year.
Photo provided by Pexels.
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