Aussies are paying billions of dollars a year in surcharges to use their card or other cashless methods to make payments. One politician hopes to make this “rort” a thing of the past and is calling for fee-free digital payments.

Labor MP Jerome Laxale said Aussies were paying up to $4 billion in card surcharges simply to “access their own money”. Digital payment methods have skyrocketed in recent years, with the pandemic accelerating the transition away from cash payments, and more businesses than ever are now charging customers a fee to pay with a credit or debit card.

“I do not begrudge small businesses for having to pass these exorbitant costs on, nor do I expect them to have to take on the cost overnight,” Laxale told Yahoo Finance.

“I question why we are all being charged fees at all. Cash is fee-free to use, so should digital.”

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Speaking in parliament last week, Laxale said other countries already had adopted fee-free digital payment systems, while Aussies were being stung by fees despite the technology already existing in Australia.

“The New Payments Platform owned by banks and big retailers and the RBA currently provides fee-free bank-to-bank fund transfers in an instant,” he said.

“Be it through Osko, PayID, scanning a QR code or new rules to open up Apple or Google wallets, unlocking the potential of the New Payments Platform is the answer to this $4 billion nightmare.”

Using parliamentary privilege, Laxale accused the banks and card providers of receiving “kickbacks” and claimed this was part of the reason why consumers were not getting fee-free payments today.

The Australian Banking Association has rejected this claim and noted there were costs involved with processing digital payments, including the rental of the payment terminal and ensuring payments were made safely and securely.

Aussies slugged with card surcharges

Analysis by Canstar found Aussies were paying an average of $140 a year in surcharges for opting to use electronic payments over cash. That adds up to $4 billion, a $400 million increase on the year before.

The Reserve Bank of Australia (RBA) estimated EFTPOS payments cost less than 0.5 per cent of a transaction to accept, Visa and Mastercard debit cards cost between 0.5 and 1 per cent, while Visa and Mastercard credit cards cost between 1 and 1.5 per cent.

Businesses can charge a surcharge for paying by card but there is a ban on excessive surcharging. That means they can’t charge more than what it costs them to process the transaction. Businesses cannot apply a surcharge if they don’t accept cash.