A federal inquiry will examine surcharge fees and competition concerns across the major card-based payment schemes and digital wallets like Apple Pay and Google Pay, as well as emerging payment technologies.
The parliamentary committee inquiry into schemes, digital wallets and innovation in the payments sector was established this week, with Labor MP and former Industry minister Ed Husic as chair.
The government-led committee will examine whether the current payment schemes landscape dominated by Mastercard and Visa is “fair and accessible” for small businesses and consumers.
Credit and debit cards now account for around $94 billion worth of transactions each month, Reserve Bank of Australia data shows, with a growing number of these through digital wallets.
A rapidly growing number of these transactions are through mobile wallets, which accounted for $160 billion worth of transactions in 2023-24 — a 20 per cent rise on 2022-23, according to the Australian Banking Association.
The declining use of cash and rise of digital payments has meant that consumers currently pay around $1.2 billion in card surcharge fees each year, which the government has proposed banning for debit cards.
According to the terms of reference, the inquiry will look at the “transparency and affordability of scheme fees for payment services providers,” as well as the “inequity of payment costs for small businesses”.
What the inquiry describes as the “consolidated market power between payment schemes” will also be considered to understand whether it has impacted consumer choice.
The future of payments will also get a look in, with the committee planning to examine emerging payment technologies, including cryptocurrencies and other account-to-account-based payments.
Mr Husic, who was appointed chair of the House standing committee after being dropped from the frontbench in a post-election factional power play, said the inquiry would serve as a timely check-in on the payments industry.
“After spending up ahead of Christmas, many Aussie consumers will scan a sharp eye over their credit card statements and ask questions about how they’re charged,” he said in a statement.
“This inquiry will give Australians a chance to have their say on whether they think current payment schemes are fair, accessible, competitive and affordable.
“It’s clear from existing evidence that payment schemes and digital wallets will have growing cost implications for small businesses and consumers. This inquiry offers the opportunity to do a deeper dive into that.”
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