<div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>A payments expert has watered down fears the </span><a href="https://www.9news.com.au/national/reserve-bank-of-australia-wants-to-remove-card-surcharges/6e7688de-6866-4470-b716-d886c0cc229a" rel="" target="_blank" title="Reserve Bank's"><span>Reserve Bank's</span></a><span> proposed ban on card surcharges and accompanying cap on interchange fees will force banks to roll back credit card perks like frequent flyer points.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The RBA's consultation paper on surcharges suggests capping the maximum interchange fee banks and service providers charge for card transactions.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>It said the current fees paid by businesses to card providers are "too high".</span></div></div><div><div id="adspot-mobile-medium"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/perth-couple-esta-problem-cruise-cancelled-face-ban-from-travelling-to-usa-exclusive/c776994f-92cf-458f-b1d8-7de44ed985fa" target="_blank"><strong><span>Aussie couple's dream holiday ruined over US immigration debacle</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Those fees form large parts of bank and card provider revenue streams and pay for credit card perks like frequent flyer points.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The rewards are incredibly popular – more than a third of credit card spending in Australia is done on Qantas frequent flyer points-earning cards alone, </span><a href="https://www.9news.com.au/national/qantas-david-jones-loyalty-partnership/54478b89-0e32-4424-88d5-a68b289c1547" rel="" target="_blank" title="according to the airline."><span>according to the airline.</span></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The RBA itself warned the programs could be scaled back in response to an interchange fee cap, which could deliver a hit of almost $1 billion.</span></div></div><div><div class="OUTBRAIN" data-reactroot="" data-src="//www.9news.com.au/national/rba-interchange-fee-cap-proposed-how-this-could-impact-credit-card-perks-reward-points/2eb51926-15ae-4f3b-831f-1cef804272b5" data-widget-id="AR_5"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>It is important to note that American Express credit cards do not fall under the RBA's remit and won't be impacted.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Issuers are expected to experience a reduction in interchange revenue of around $900 million under the preferred package and $800 million under the alternate option," its consultation paper states.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Some issuers may choose to increase cardholder fees or reduce benefits such as rewards points, particularly on credit cards, to boost their profitability in response to reductions in interchange settings," it adds.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Payment Services managing director Brad Kelly told 9news.com.au the interchange fee is the "holy grail" for financial institutions.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>He said the proposed cap could have a flow-on impact for customers but doesn't expect perks like Qantas points will be stripped back.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"What it will mean is that revenue bucket is just not big enough anymore to pay for rewards, so they're going to have to work out a different way to pay for it," Kelly explained.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Potentially what will happen is is that rewards cards will evolve. It's not the end of frequent flyer points on rewards cards. Far from it."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Kelly said reward points may be offered to customers directly via merchants instead.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Because this, it could result in increased competition and better perks for spending money on credit cards.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"The customer could be better off," Kelly said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/world/michigan-walmart-stabbing-bystanders-stop-attack-on-11-people/12d77ebe-10c8-46d7-ae4c-48713fe37b23" target="_blank"><strong><span>Armed with just a trolley, Matthew rammed into mass stabber</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"I also think there's opportunity for alternatives, where you still get your rewards per spend, but it's handled differently."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Money saving expert Joel Gibson said customers shouldn't be wary of losing perks.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Instead, he warned other key features like scam protection could be impacted.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Reducing fraud protection would be a serious downside, for example," he said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"But reducing the value of rewards programs would probably leave most people better off in my view."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Gibson said the average punter overvalues rewards.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The average credit limit in Australia is $10,439, which isn't a lot if you're hoping to score business-class flights on points alone.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Most of us pay more in annual fees, merchant fees and interest than we get back in points, even if we don't realise it," he said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"And most of us have no idea what a point is worth and the rewards programs make it hard to work out by giving them different values for different purchases."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>None of the major banks approached by 9news.com.au said whether or not they are considering reducing card perks in response to the RBA reforms.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>It has been suggested Apple Pay may be under threat if the surcharge ban goes ahead.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>At least one major bank is considering pulling the pin on Apple Pay, the </span><a href="https://www.afr.com/companies/financial-services/is-it-the-end-of-card-rewards-programs-as-we-know-them-is-apple-pay-next-20250718-p5mg28" rel="" target="_blank" title="Australian Financial Review"><em><span>Australian Financial Review</span></em></a><span> reported this month.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/world/police-hunt-gunman-who-shot-police-officer-civilians-manhattan-us/c545d211-0267-4535-a2fb-5372d477de94" target="_blank"><strong><span>Four dead, including police officer, in Manhattan shooting</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Kelly said he doubts any bank would risk such a huge chunk of their transactions.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Apple Pay now represents about 40 per cent of card payments in Australia," he said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"There's no way [a bank] would switch off 40 per cent of its payment traffic."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>A feedback window on the RBA's proposals is open until August 26 this year, before the reforms are finalised.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>They are scheduled to come into effect next July.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>There is a chance the surcharge fee ban could be passed onto customers, </span><a href="https://www.9news.com.au/national/rba-surcharges-proposal-nsw-pub-owner-says-customers-will-pay-more/ede51b8d-a09c-436d-912b-776a012c8a99" rel="" target="_blank" title="some business owners have warned."><span>some business owners have warned.</span></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The RBA has also proposed more transparency around fees by requiring providers to display their wholesale charges clearly.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>9news.com.au has contacted the Australian Banking Association for comment.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><a href="https://www.9news.com.au/national/how-to-follow-9news-digital/29855bb1-ad3d-4c38-bc25-3cb52af1216f" target="_blank"><strong><em><span>DOWNLOAD THE 9NEWS APP</span></em></strong></a><strong><em><span>: Stay across all the latest in breaking news, sport, politics and the weather via our news app and get notifications sent straight to your smartphone. 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