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Surcharge bans, online shopping straight from bank accounts and other modern payment methods already standard in Europe could be about to change the payment landscape in Australia.
Those are the predictions of Ben Zyl – the chief executive of digital wallet company Waave – who said they would depend on the interplay between action by the government, the RBA and major companies.
The first change he predicts for 2025 is a new law banning debit card surcharges, after the government in October proposed a permanent ban on debit card surcharges from 2026.
“We will see a ban on debit card surcharges, but it will take another 12 months to come into effect,” Zille said, but added that “the surcharge issue is likely to remain unchanged” because of the RBA’s restrictions.
“The RBA does not yet have the power to cap interchange fees … and there is no visibility into fees for card schemes,” he said.
While some countries’ surcharge bans extend to credit cards, Australia’s proposed ban does not.
Zill said this “leaves the door open” for businesses to charge “general ‘card fees’ to cover all bases.”
RMIT University finance associate professor Angel Jong said it would not affect all Australians in the same way – those with small businesses would be worse off, while larger businesses could use their bargaining power to increase your gains in other areas.
“In Australia there is a significant disparity between the fees paid by large and small traders. In fact, RBA figures show that small businesses pay around three times as much in fees as larger businesses,” she wrote for The Conversation.
“Banning surcharges on them could potentially lead to traders increasing their base prices to cover these costs.”
“The lack of surcharges may also reduce competitive pressure on card networks to keep their fees under control, potentially leading to higher costs in the long run.”
“Make Life Easier”
The second prediction is big adoption of PayTo – a digital alternative to direct debits already facilitated by banks in Australia – by “big billers like energy companies”, Zille said.
“In 2025 PayTo will move from a wait-and-see for merchants to a mandatory part of their payments roadmaps.
“PayTo will find its niche in corporate retail and large billers such as energy companies. These are the businesses that have the capacity to bring it to scale and provide a clear proposition for consumers, such as no extra fees on big-ticket transactions.”
It said it will offer “a one-click user experience for bill payment, while making life easier for merchants on the back end.”
“Once those dominoes fall, it’s only a matter of time before smaller retailers get involved, but they’ll want to see it there first.”
“Key Year”
Zyl’s third prediction is that account-to-account payments like Bank Pay – which cuts out middlemen like cards and is already “virtually mainstream across Europe” – will become a less scary option for consumers here.
“As account-to-account payments increase in areas such as bill payments, consumer awareness of the ease and security of Pay by Bank will grow,” Zille said.
“2025 it will be a key year for providers to demonstrate how this works and why it should be standard in every checkout.”
Even the nation’s legacy group electronic account-to-account clearing system (BECS), used for pension, welfare, salary and dividend payments, is set to migrate all payments to the New Payments Platform (NPP) by 2030, according to the RBA Annual report of the Payment System Board.
The industry set a broad implementation target with the understanding that “a significant disruption to BECS could cause serious economic damage to end users” and that “the significant changes required to facilitate decommissioning have the potential to increase risks in the payment system”.
Scan and go
The latest prediction is that debit cards will be abandoned in favor of self-service payments using technology such as that which underpins Woolworths’ Scan and Go trolleys.
“Consumers will simply link their account and be debited after they pack their bags,” Zille said.
But that won’t be a widespread phenomenon for some time, he predicts.
“It will take years before we see this idea rolled out to smaller businesses, but the big end of town is focused on embedding payments into the journey through the store without having to pull out a wallet or phone,” he said.
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