I found this gem in the Productivity Commission’s draft report on Competition in the Australian Financial System.
The fees banks charge each other for card payments are passed on to merchants. These are, in turn, paid by consumers either as surcharges on particular purchases or more commonly in the case of smaller merchants, as higher prices overall. In practice, the fees also vary with the types of cards — a customer who pays with a premium credit card may cost the merchant a higher fee than a customer who pays with a basic ‘no frills’ card. To give merchants some control over their payments system costs, we consider that merchants should be given the capacity to select their own default route that is to be used for payments by dual network cards.
Regulation of bank interchange fees and surcharging has proved complex and there is little genuine commercial justification for interchange fees. The Payments System Board of the RBA should ban, by mid-2019, all card interchange fees as a way to lower overall costs to users.
The RBA has long pushed the line that interchange fees result in higher prices for consumers. If that were true, we would see a lot more signs like this one:
I took that photograph at a restaurant in Melbourne late last year. Why? Because it is the only such sign I have ever seen and is the only evidence that supports the RBA line on interchange fees. But remember the plural of anecdote is not data.