CREDIT CARD PROCESSING REFORMS - FTA / APSA ADVOCACY

Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) met with senior representatives from the Department of Finance this week to discuss a wide range of regulatory reform matters affecting the international trade sector.
 
A key issue raised was the enacted prohibition on businesses recovering credit card processing fees and the widespread commercial impacts already being felt across Australian commerce. It is evident that many businesses have been compelled to recover surcharges through higher overall pricing, meaning all customers, including those using low-cost payment methods, will subsidise credit card users. As well as being another direct inflationary trigger, this reduces transparency and undermines the principle that users of higher-cost payment methods should bear the associated expense.
 
Importantly, we provided the department with detail on impacts affecting importers, customs brokerages and freight forwarders with the following referenced in our submission:

• Tight margins and high-value transactions: The customs brokerage, freight forwarding and trade facilitation sector operates on modest margins and process significant payments on behalf of importers and exporters — including freight charges, customs duties, GST and other government-related amounts. Credit card fees on these high-value transactions can be substantial. Preventing cost recovery would impose significant financial pressure, particularly on small and medium-sized operators.
• Critical impact on duty and GST payments: Duty and GST are pass-through charges. Many importers, especially SMEs, rely on credit card facilities to manage cash flow and secure timely cargo release. Where customs brokers offer this facility, the merchant fee is not discretionary — it is a direct cost of enabling importers to use credit for government charges.
• Risk of withdrawal of credit card payment options: If customs brokers cannot recover these costs, many will be forced to discontinue credit card payment facilities. This would create material cash-flow challenges for importers, potentially delaying cargo release and disrupt supply chain efficiency.

FTA/APSA Position
 
FTA/APSA sees merit in reforms that promote fair, competitive and efficient payment systems. However, we strongly submit that any reform should focus on reducing the underlying merchant fees charged by financial institutions and card schemes, rather than shifting these costs onto businesses that act as intermediaries for government revenue collection.
 
We have formally requested that the Federal Government and the Reserve Bank of Australia engage with FTA/APSA and affected industry participants to address the unintended impacts of these reforms.

Paul Zalai - Director FTA / Secretariat APSA