Media Release: Government’s FSI response is a reprieve for credit card consumers

“Today’s announcement by the government is a reprieve for Australian credit card consumers”, said Aaron Lane, National Campaign Director of ‘Don’t let them pass the buck’.

Today the Turnbull government released its response to the Financial Systems Inquiry. Among other things, the government did not endorse lowering interchange fees and noted that the Payments System Board was currently completing work on interchange fees through its Review of Card Payments Regulation.

An interchange fees is a fee paid between banks when a customer uses a credit or debit card to make a purchase. These are different to credit card surcharges. The Australian Taxpayers’ Alliance gave evidence before a Senate Inquiry last week which is currently examining interchange fees as part of a wider inquiry into credit card interest rates. The ATA recently released an academic report which highlighted that there is no theoretical basis for the regulation of interchange fees by the Reserve Bank, and another academic report questioning why the RBA has regulatory authority over a matter a competition policy.

“It was sensible for the government to postpone any proposed tightening of interchange fee regulation. This issue is currently being examined by a Senate inquiry, and by the RBA’s Payments System Board, and it makes sense that the government did not want to pre-empt the outcome of those reviews,” continued Mr Lane.

“The weight of evidence shows that interchange fee regulation hurts consumers. Interchange fee regulation has cost consumers over $8 billion dollars over the last 12 years. Increasing regulation will only make it worse. The hardest hit will be community-owned banks, credit unions and building societies, which will limit competition and consumer choice.

“Interchange fees pay for things like credit card fraud protection, interest-free periods, and credit card rewards programs which all provide significant benefits to consumers. These are all under threat by increased regulation.

“Credit card customers all over Australia are saying ‘Don’t let them pass the buck onto me’, and that’s exactly why we have launched a new campaign to fight increased regulation of interchange fees at www.dontpassthebuck.com.au,” said Mr Lane.

ABOUT: ­

The Australian Taxpayers’ Alliance is a grassroots advocacy and activist organisation comprising of over 25,000 members dedicated to representing taxpayers and opposing over-regulation.

MEDIA CONTACT:

Aaron Lane, National Campaign Director.

Mobile: 0400838630|Email:aaron.lane@taxpayers.org.au

Help Us Share Our Message

Share our message of less taxes, regulation and
wasteful spending