Is Bob Katter right? RBA and ACCC disagree about cash acceptance

This week, Queensland MP Bob Katter claimed the parliamentary cafe was breaking the law by not accepting cash as a payment for his lunch order. Speaker of the House Milton Dick has reportedly vowed to immediately lift any cashless ban by retailers in parliament house.

Regulations covering cash acceptance at retail points of sale are the responsibility of the Reserve Bank of Australia (RBA) and the Australian Consumer and Competition Commission (ACCC).

The RBA and the ACCC's regulations contradict each other and have clearly led to mass confusion in Australia. Most Australians believe, as Bob Katter does, that cash is legal tender and must be accepted.

Currently the RBA advises merchants that they should offer a non-surcharged payment method or build their surcharges into their base prices:

"Merchants that choose to surcharge will generally offer a non-surcharged payment method. This will typically be a payment type with a lower cost of acceptance for the merchant. If no surcharge-free method is offered, the amount of the surcharge should be built into the base price and not added on to the price of an item. Consistent with requirements under the Australian Consumer Law, merchants are required to prominently disclose the terms of any surcharge. A consumer who wishes to avoid paying a surcharge should ask the merchant to identify an alternative non-surcharged payment method."

Banknotes and coins are the traditional non-surcharged payment method. These RBA regulations suggest that a merchant can’t impose a card surcharge unless they offer cash as non-surcharged payment method.

The ACCC advises merchants and consumers differently, saying that merchants don’t need to offer a non-surcharged method of payment:

"Businesses incur costs for processing certain card payment types. Some businesses include these costs in the prices they charge for their products. Others pass the costs on as a surcharge for paying with the card. Certain rules apply when a business applies a surcharge to particular cards:

• the surcharge must not be more than what it costs the business to use that payment type
• the surcharge can only include costs that are for accepting that particular payment. For example, if a business pays an amount for gateway fees for processing credit card transactions only, the business cannot include this cost in its debit card transactions." 

Further, the ACCC regulations have a glaring weakness: Merchants must limit surcharging to their cost of acceptance but cost of acceptance is set by card schemes and acquiring banks. The ACCC’s regulations are not working to contain the cost of card surcharges. The RBA’s regulations are not working to ensure consumers are offered a surcharge-free way to pay.

"The vast majority of Australians believe that legal tender, as written on our banknotes, means this note can be used to buy goods and services in Australia," said Jason Bryce, spokesperson for the Cash Welcome campaign.

"Most Australians believe, like Bob Katter does,  that retailers are actually not following the law in refusing to accept cash.

"This confusion has contributed to the issues affecting the cash industry now.

"The RBA, the ACCC and the Australian parliament needs to clear this mess up and provide some certainty for Australians who trust and rely on cash.

"Our petition calling for mandated cash acceptance now has over 160,000 signatures and is growing every day, without a big marketing budget." 

https://www.change.org/BankingAndCashGuarantee

The RBA and the ACCC have conflicting regulations about cash acceptance and card surcharging at retail points of sale.

Cash Welcome is a campaign started by Jason Bryce and supported by donations from the public and business.

Jason Bryce

[email protected]

0428 777 727