Prices rise as card surcharges banned
The standard price of a coffee (often used as an example by the prime minister) is up by 50 cents, no matter how you pay.
“just like electricity and wages … the cost of taking cards and cash will be built into the price,” said RBA governor Michelle Bullock on Tuesday.
But the way a consumer pays is NOT like other business costs
A business doesn’t produce the consumer’s payment method, they just get to choose to accept it or not.
The payment is NOT part of the recipe, the process of making the goods or service.
Governments issue money to facilitate commerce and trade. This is a key service of all governments.
Of all the ‘benefits’ that come from being governed, currency is widely accepted by most people as a genuine good, a real benefit.
Card surcharging at the point of sale was an Australian regulatory innovation, opposed by banks, Visa and Mastercard.
Upfront disclosure and passing through of surcharges provided downward pressure on card costs.
The prime minister said the ban on surcharging will save Australians money and help with the rising cost of living.
“The RBA estimates that the aggregate effect on measured consumer prices if surcharges are pushed through to prices will be around 0.1 per cent.
“… prices may rise by more than the current level of surcharging, as some business owners decide to round up.
“We don’t have 8¢ coins, so the $5.08 coffee might become $5.10 or $5.20 or $5.50,” said Wes Lambert, chief executive of the Australian Restaurant & Café Association.
“By this weekend, Australians will be paying more.”
When surcharges are added into prices, GST on the purchase also goes up, so government coffers will also get a boost.
This issue has dominated the media this week.
