1 00:00:00,360 --> 00:00:03,480 S1: Okay, now it's only got announced, uh, less than an 2 00:00:03,480 --> 00:00:05,760 S1: hour ago, but the reserve Bank has done its review 3 00:00:05,760 --> 00:00:09,400 S1: of credit card surcharges and debit card ones as well. 4 00:00:09,760 --> 00:00:11,560 S1: It was. Oh, God. I think around the turn of 5 00:00:11,560 --> 00:00:15,520 S1: the century, they, the reserve Bank decided that it was 6 00:00:15,520 --> 00:00:19,160 S1: okay for merchants to pass on the reasonable cost of providing, 7 00:00:19,200 --> 00:00:23,560 S1: you know, electronic payment services. Now, back then, probably, I 8 00:00:23,560 --> 00:00:27,360 S1: don't know, 80% of transactions were cash. This was back in. 9 00:00:27,360 --> 00:00:30,720 S1: So the year 2,020% would have been electronic. That's been 10 00:00:30,720 --> 00:00:34,519 S1: flipped on its head. It's now 90% electronic and only 10% cash. So, 11 00:00:35,080 --> 00:00:37,879 S1: you know, depending on the merchant or the retailer, we 12 00:00:37,880 --> 00:00:40,879 S1: are paying these little surcharges all the time. They add 13 00:00:40,880 --> 00:00:44,600 S1: up to $1.6 billion a year around Australia. And the 14 00:00:44,600 --> 00:00:46,920 S1: reserve Bank has now said it is not appropriate. In fact, 15 00:00:46,920 --> 00:00:50,440 S1: it will be illegal as of October for merchants to 16 00:00:50,479 --> 00:00:55,560 S1: add those charges onto people's bills. An adjunct professor at 17 00:00:55,560 --> 00:01:00,029 S1: Swinburne Uni specialising in financial services and payments, Steve Worthington, 18 00:01:00,030 --> 00:01:00,709 S1: good morning. 19 00:01:01,350 --> 00:01:02,190 S2: Good morning Tom. 20 00:01:03,030 --> 00:01:05,470 S1: What is that the sort of history here that when 21 00:01:05,470 --> 00:01:07,590 S1: the reserve Bank said it was okay to pass on 22 00:01:07,590 --> 00:01:11,709 S1: these surcharges, not many people used electronic payments. But now 23 00:01:11,709 --> 00:01:13,030 S1: almost everyone does. 24 00:01:14,150 --> 00:01:16,750 S2: Yeah, you've got it right there. We're using we were 25 00:01:16,750 --> 00:01:20,750 S2: using a lot less of the digital passing of cards, etc. 26 00:01:20,790 --> 00:01:24,430 S2: we paid more with coffee. Yes. Coffee, I mean cash. 27 00:01:24,910 --> 00:01:27,670 S2: I was talking about the coffee mark. Um, yeah. But 28 00:01:27,709 --> 00:01:30,990 S2: basically though, this wasn't done to encourage people to use 29 00:01:30,990 --> 00:01:34,350 S2: their debit cards rather than their credit cards in 2003 30 00:01:34,350 --> 00:01:37,950 S2: when this came in. Uh, from the RBA. So the 31 00:01:37,950 --> 00:01:40,429 S2: idea was that you were only surcharge when you paid 32 00:01:40,430 --> 00:01:43,110 S2: with a credit card, because that's more expensive for the 33 00:01:43,110 --> 00:01:46,670 S2: banks and the merchants than the credit debit card. However, 34 00:01:46,709 --> 00:01:48,750 S2: what's happened, as you pointed out, I think is a 35 00:01:48,750 --> 00:01:51,430 S2: lot of merchants now have just merged the two together 36 00:01:51,430 --> 00:01:53,630 S2: and put it in as a surcharge. And we pay 37 00:01:54,630 --> 00:01:57,150 S2: no matter what card we use, debit or credit. 38 00:01:58,300 --> 00:02:01,580 S1: Okay. So. So as of October, so that's six months 39 00:02:01,580 --> 00:02:05,300 S1: away or six months tomorrow. Um, you can't add them 40 00:02:05,300 --> 00:02:07,620 S1: on anymore. So that I mean, I mean, the fees 41 00:02:07,620 --> 00:02:09,860 S1: don't go away, do they? I mean, the merchants and 42 00:02:09,860 --> 00:02:12,300 S1: the retailers and so forth are still being charged fees 43 00:02:12,300 --> 00:02:14,260 S1: by the bank. So what happens then? 44 00:02:15,300 --> 00:02:18,739 S2: Well, um, as you as you pointed out earlier on, 45 00:02:18,780 --> 00:02:21,900 S2: the merchants will probably introduce some of those charges, some 46 00:02:21,900 --> 00:02:25,180 S2: of those costs to them, the cost of accepting cards, etc. 47 00:02:25,180 --> 00:02:28,180 S2: into their prices. But when I put my submission into 48 00:02:28,180 --> 00:02:31,860 S2: the RBA about this issue of Surcharging, my headline was 49 00:02:31,860 --> 00:02:34,820 S2: the price that you see is the price that you pay. 50 00:02:35,020 --> 00:02:36,900 S2: So when we go for a coffee, if we see 51 00:02:36,940 --> 00:02:42,260 S2: it's $5 per coffee, we pay $5 nowadays. If you 52 00:02:42,300 --> 00:02:44,660 S2: see a sign that says $5 and you tap it 53 00:02:44,660 --> 00:02:48,380 S2: with your card and you end up paying $0.10 in surcharging. 54 00:02:48,380 --> 00:02:51,180 S2: So I want to see it very, very clearly. We're 55 00:02:51,180 --> 00:02:53,580 S2: paying see what the price, you know what the price is. 56 00:02:53,580 --> 00:02:54,820 S2: That's the price we pay. 57 00:02:55,690 --> 00:02:57,329 S1: Yeah, I think I think you're absolutely right. I mean, 58 00:02:57,370 --> 00:02:59,090 S1: my wife the other day. I couldn't believe it. She 59 00:02:59,090 --> 00:03:01,370 S1: got a takeaway coffee and she didn't ask them how 60 00:03:01,370 --> 00:03:05,490 S1: much it was. The coffee would you believe was $9.40. Now, 61 00:03:05,490 --> 00:03:08,810 S1: this is at obviously a fairly expensive place. And even 62 00:03:08,810 --> 00:03:12,850 S1: to add insult to injury, $9.40 became $9.66. Once she. 63 00:03:12,889 --> 00:03:14,610 S1: Once she used her credit card to pay. 64 00:03:15,290 --> 00:03:17,450 S2: Yeah. And. Exactly. And I think I've got a good 65 00:03:17,450 --> 00:03:19,130 S2: story for you there. If you got with me. I 66 00:03:19,130 --> 00:03:22,850 S2: took my family out for dinner, a lunch one a 67 00:03:22,850 --> 00:03:25,490 S2: couple of months ago on a Sunday, and we knew 68 00:03:25,530 --> 00:03:28,889 S2: there was a Sunday surcharge of 10% in this particular restaurant. 69 00:03:29,210 --> 00:03:32,090 S2: I was pretty big. I thought, I'll pay the bill. 70 00:03:32,290 --> 00:03:35,130 S2: I went to get the bill and and then they 71 00:03:35,130 --> 00:03:36,730 S2: asked me if I wanted to give a tip and 72 00:03:36,730 --> 00:03:38,410 S2: I pressed the button. They gave a tip because the 73 00:03:38,410 --> 00:03:40,890 S2: service was good, but when I looked at my receipt, 74 00:03:40,890 --> 00:03:44,730 S2: I'd been surcharged on the Sunday surcharge and surcharged on 75 00:03:44,730 --> 00:03:47,890 S2: the tip. I mean, I just they just forgive the pun. 76 00:03:47,890 --> 00:03:49,450 S2: They just tip me over, you know? 77 00:03:49,490 --> 00:03:53,250 S1: Right. So. So if lunch was, say, for your whole family, $200, 78 00:03:53,720 --> 00:03:56,640 S1: Then there was a surcharge of 10% that became 220. 79 00:03:56,920 --> 00:04:00,600 S1: And let's say I took them another 20 that became 240. 80 00:04:00,960 --> 00:04:04,320 S1: And then there was an electronic payment surcharge on the 81 00:04:04,320 --> 00:04:05,440 S1: 240 as well. 82 00:04:06,520 --> 00:04:09,240 S2: Yeah. I mean, and they surcharge me on the tip 83 00:04:09,240 --> 00:04:12,400 S2: that I paid, which, which, you know, what I do 84 00:04:12,400 --> 00:04:14,480 S2: now is whenever I'm going out like this, I take 85 00:04:14,480 --> 00:04:16,919 S2: some cash with me. And if the service is good, 86 00:04:16,920 --> 00:04:19,840 S2: I give it to the waitress or the waiter and 87 00:04:20,200 --> 00:04:22,560 S2: buy cash because I know then the money's going to 88 00:04:22,560 --> 00:04:24,799 S2: them and I'm not being surcharged for that. 89 00:04:25,000 --> 00:04:27,680 S1: Yeah. Okay. Thank you. Steve. Steve Worthington there, adjunct professor 90 00:04:27,680 --> 00:04:31,320 S1: at Swinburne University, specialist in financial services and payments. So 91 00:04:31,320 --> 00:04:33,520 S1: what he's saying is a lot of things might go 92 00:04:33,520 --> 00:04:36,320 S1: up in price a little bit, uh, as of October 93 00:04:36,320 --> 00:04:39,520 S1: when the retailer can't hit you with the surcharge. But 94 00:04:39,520 --> 00:04:42,080 S1: at least you'll know if you pay. Well, you might 95 00:04:42,080 --> 00:04:44,200 S1: be lucky to pay this if you pay $5 for 96 00:04:44,200 --> 00:04:48,240 S1: a coffee. It's $5 and there's no extra 10 or $0.15. 97 00:04:48,279 --> 00:04:51,599 S1: $5 is $5. I agree with him. I'd. I'd rather 98 00:04:51,600 --> 00:04:52,520 S1: know what I'm paying.