Australia’s Crackdown On “Excessive” Interchange

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."