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The payments landscape has changed rapidly since the RBA’s last review of retail payment systems five years ago. The emergence of new payment schemes, such as buy now, pay later (BNPL) has skewed the market by hiding the true cost of using these kinds of services. This ultimately directs consumers away from lower cost payment options. The result is a marketplace where BNPL providers are not playing by the same rules as other payment providers, hurting merchants and consumers alike. Consumers ultimately bear the cost of this as merchants are forced raised the costs of goods and services to cover the high costs imposed by BNPL providers.

Our organisations strongly support action by the RBA to level the playing field and allow merchants to send price signals to customers that reflect the reasonable costs of using different payment options. The RBA should also aim to future-proof the payments system to accommodate new and emerging payment methods.

The submission also covers:

• Least-cost routing (LCR): we support giving merchants greater control over routing options; and
• Difficulty cancelling direct debit payments: many Australians face difficulties and barriers when trying to shut down a recurring payment or direct debit. A coordinated approach is needed to fix this issue and we are calling on the RBA to organise regulators and industry to address these problems.

You can read the full submission here [PDF]