Card surcharge ban will take time to work through: bank

The ban on card surcharges, introduced by the central bank to provide consumers with greater transparency at the point of sale, came into effect on Thursday. While the transition has been relatively smooth for the Commonwealth Bank of Australia, many businesses are experiencing a degree of confusion and anxiety. Retail sales head Angus Sullivan told Australian Associated Press that the bank is doing what it can to support customers during this period of change.

As part of the transition, major banks have removed the option to charge surcharges from in-shop terminals used by merchants, including key hospitality operations. Businesses are still responsible for covering the cost of payment processing, either by absorbing the fees or passing them on to customers through increased prices. Despite the interchange fee dropping from 0.8 per cent to 0.3 per cent, shopkeepers continue to pay merchant fees to their banks.

Commonwealth Bank has reduced its merchant pricing to 0.99 per cent, while Westpac has cut its fee to 0.79 per cent. The move is expected to create more price-based competition for merchant services among businesses. However, Commonwealth Bank is confident it can meet this competition, particularly from its main rivals: Westpac, National Australia Bank, and ANZ.

The bank acknowledges that this period of change may be confusing for businesses, but it is working to provide guidance and support.