A bill passed by both houses of the Australian Parliament bans companies “from charging an excessive payment surcharge.” But what does Parliament consider excessive? That is partially dictated by rules from the Reserve Bank of Australia (RBA).
The bill requires that interchange must “reflect the cost of using the payment methods for which they are charged.” Does it allow for any margin? And if so, how much would Parliament consider reasonable?
In a report from PwC (aka PricewaterhouseCoopers) Australia, “whether a surcharge will be deemed excessive is dependent upon whether there is a Reserve Bank of Australia (RBA) standard or regulation in place. The RBA is currently consulting on a standard and is due to make a decision in May 2016. The Bill will not become operative until the standard is in place.” It added: “If an infringement notice is issued it will impose a penalty of 600 penalty units ($108,000) for a listed corporation and 60 penalty units ($10,800) for a body corporate that is not a listed corporation.”
Much of this was pushed by an RBA report from December (2015) that argued for “moving away from a limit on surcharges based on ‘the reasonable cost of acceptance’ to one based on fees paid by a merchant to its acquirer or payment facilitator and obliging the provision to merchants of information on average acceptance costs for each system,” PwC noted.
That prompted pushback from various payments players, especially financial institutions that maintained that “providing statements to merchants on average acceptance costs for each payment system would be difficult, particularly in instances where an organization’s billing process relies on multiple or third-party systems. It was also submitted that providing annual statements to merchants would be a significant change. These concerns resulted in some stakeholders advocating for a significant implementation delay before the proposed changes take effect,” PwC said.
Is this merely the latest global ripples from Durban?