Jerome Laxale, you are on a winner son. Defy the banks and do not believe anything they say
Jerome Laxale, the Labor MP for Bennelong and a member of the House Economics Committee yesterday announced the beginning of a “campaign for fee-free digital payment reform.”
For now Laxale is teasing his colleagues and the industry as to the methods he will employ and who his allies are.
On Friday, Laxale asked RBA governor Michele Bullock “about the impact of these surcharges and the urgent need for reform” receiving a fairly anodyne answer in response.
On Thursday, following its quarterly meeting, the Payments System Board confirmed that as part of the upcoming Review of Retail Payments Regulation, the Board “agreed to commence consultation on merchant card payment costs and surcharging.”
The PSB saved its most high-minded commentary last week for the need for “further regulatory intervention” in the arena of debit payments.
And specifically in relation to its frustration over the roll out of least-cost routing.
The board said it “expects providers, including payment gateways, to accelerate progress on making LCR widely available for online transactions and enabling LCR for merchants that could benefit from it.
“The board continues to expect the industry to deliver LCR functionality for mobile-wallet transactions by the end of 2024.”
More than likely Laxale will now take regular opportunities to vent in the House of Representatives and the Labor caucus on ‘fee free payments’, seeking to toughen the government’s and the Treasurer’s rhetoric.
In his corner, more or less, Laxale will find supportive voices in the form of the recently established Independent Payments Forum, a coalition of deeply experienced and connected consultants (and others) in the payments domain.
Animating more of their own program for change yesterday, the Independent Payments Forum argued “simplistic solutions like ‘banning surcharging’ won't stop the billions of dollars of card fee rorts that currently hurt millions of vulnerable Australians every time they shop and increase the cost of living.
“In fact, knee-jerk policy decisions may make the situation worse and lead to unexpected consequences like: killing off competition; increasing costs for small business; hiking prices at the checkout; and ramping up profits for banks, platforms and card schemes.”
Instead, the IPF called for:
· Price signals for expensive premium cards – “stop cross subsidisation”
· A ban on blended pricing of credit and debit card merchant fees
· A curb on “sweetheart deals for big retailers that hurts small business”
· A cap on all debit card fees “at a very low rate to cut surcharging”
· And, of course, support for a mandate for [universal] least cost routing that “returns the benefits to users.”