What merchants see on 2 October is up to us

The argument for being on the front foot with merchants regarding the drop in interchange fees.

On 1 October, the interchange fee on a domestic consumer credit card transaction drops from 0.80 per cent to 0.30 per cent, and for debit it goes from 0.20 to 0.16. The Reserve Bank estimates the credit change alone takes around $910 million a year out of the cost of accepting cards in Australia.

That is a big number, and I think our sector should be talking about it more than it is. Almost everything written since the RBA's conclusions paper has been about the surcharge ban. Fair enough, it is visible and it changes what people see at the checkout. But only around 16 per cent of Australian businesses were surcharging when the reforms were announced. The interchange cut reaches every merchant that accepts a card.

So the question two weeks out is a simple one. How much of it actually lands with them, and can we show our working?

I should declare my interest: I run a payments company, so this is a question I am asking myself as much as anyone else quoting a rate this month.

Most providers will pass something through. I am not really worried about that part. What I keep coming back to is that a merchant has almost no way of checking either way, right? And that is something our industry made, even if nobody set out to make it.

Blended pricing was never designed to hide anything. It was designed to be simple, and it is simple.

One number, easy to quote, easy to sign. But interchange, scheme fees and our own margin all arrive fused into that one number. So if a provider keeps the 50 basis points, the November statement looks exactly like the September statement. Nothing looks wrong, because nothing shows up at all.

We already know how this system moves when interchange moves. In 2017, when the caps last came down, issuers repriced their rewards programs almost straight away, because those programs were funded by interchange. Everyone who could see it coming adjusted quickly. Merchants adjusted slowest, because they were the only ones who could not see it.

This time the questions are coming. In the next fortnight someone is going to email you asking for the rate card that applies on 2 October next to the one that applied on 30 September. Some of you have that answer ready. If you do not, I would get it ready now, because a provider who needs three weeks to work it out has told that merchant something they will remember.

The follow-ups are easy to predict. Whether you will quote interchange-plus, with interchange, scheme fees and margin shown separately, so that next time a cap moves the merchant can watch it land. Whether least cost routing is switched on for their account or just available if they ask for it. And what your plan is for 1 April 2027, when the foreign card caps arrive and everybody has this conversation a second time.

So my suggestion is, do not wait to be asked. Publish a position before 1 October. Not another explainer on the reforms, there are plenty of those already. Just a plain statement of what you are passing through and what you are keeping. It is a short document and I think it will set you apart from more of your competitors than you would expect.

One thing to be careful of. Weekend loadings, public holiday pricing, booking and service fees all still exist and are all still allowed. A card cost wearing a different name is not, and the ACCC has been about as clear on that as a regulator gets. If something lands in your inbox marketed as a compliant replacement fee, I would think hard before building on it.

But here is the part I am actually excited about. Transparency is not just a compliance job for us. It is the thing that makes everything else possible. Merchants only move to a new payment method when they can compare, right?

A card transaction at a blended rate costs a merchant around 1.5 per cent. An account-to-account payment over PayID sits under 0.5 per cent. That gap is enough to fund a cashback at the checkout, and a cashback is how you get a customer to try something new and then come back and use it a second time. None of that conversation starts while a merchant is looking at a single number they cannot break apart.

Our sector has spent a decade telling regulators that competition brings payment costs down better than rules do. On 1 October we get a dated, checkable version of that argument. Fifty basis points, one date, and a merchant statement that either moves or it does not. I would like us to be the ones who can point at it.

Caroline Tran is the co-founder and CEO of Hello Clever