RBA flips position on surcharge

THE Reserve Bank has flipped its position on the no-surcharge rule for businesses accepting payments through buy now pay later services.

In a conclusions paper for its review of retail payments regulation, the central bank said merchants should have the ability to apply a surcharge to customers using a buy now, pay later (BNPL) platform.

“The ability to surcharge can be particularly important for promoting competition between payment services where merchants consider it essential to accept a particular payment method to remain competitive,” the paper said.

The RBA said last year that BNPL providers could maintain the no-surcharge rule to enable them to grow their customer bases and compete against the credit card schemes.

The RBA said it was now in the public interest and consistent with its mandate to “promote competition and efficiency in the Australian payments system” for BNPL companies to remove their nosurcharge rules. Afterpay shares fell 33c to $126.