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No more card charges: how to switch to fee-free payments now

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No more card charges: how Australians can switch to fast, fee-free payments right now

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Vibhu Arya, University of Technology Sydney; Renu Agarwal, University of Technology Sydney, and Wen Helena Li, University of Technology Sydney

Every day, when Australians tap their card at a cafe checkout or hit pay on an online order, there’s often an unpredictable, frustrating extra cost: the card surcharge.

Australians pay more than $1.2 billion every year in card surcharges, with 88% of our payments still made using cards.

That high cost is why the Reserve Bank is working on how to reduce card surcharges. A final decision is due later this year.

Yet if you visit many parts of Asia, Africa or South America, you’ll discover there are cheaper alternatives to paying by card – saving money for shoppers and businesses.

Global growth in real-time payments

Real-time payments, sometimes also known as instant or fast payments, move money between bank accounts instantly. It’s often as simple as scanning a QR code, or using a mobile number or email.

For example, you place a coffee order – but instead of tapping a bank card, you use your phone to scan a QR code at the counter to pay.

Crucially for the cafe, the money lands instantly into their account. In contrast, tap to pay cards funds usually land in a business’s account a day or two later.

In countries as diverse as India, Brazil, China, Malaysia, Thailand, Indonesia, Nigeria, Bangladesh and advanced economies such as Hong Kong and Singapore, real-time payments for everyday purchases are already common.

For consumers, it’s fee-free. And particularly for small businesses, it’s much cheaper than cards.

The reason it’s cheaper is simple: there are no intermediaries taking a share of fees, with the money moving directly between two bank accounts.

How it’s done worldwide

In India, the most popular way to pay is UPI, with more than 600 million real-time transactions a day.

In China, the most popular ways to pay are Alipay and Wechat wallets, which run on QR codes linked to the user’s bank accounts. But the underlying infrastructure is via real-time payments. China has more than 1 billion real-time transactions a day.

In Brazil, the most popular way to pay is PIX, with more than 75 million transactions a day. It’s free for consumers – and up to ten times cheaper for businesses than cards.

In Singapore, PayNow remains a popular way to pay, free for both consumers and businesses.

Yet in other countries, including Australia, New Zealand, the United States and United Kingdom, card payments still dominate.

Can Australians make real-time payments now?

Yes – but we’re doing it far less than we could.

You can make instant transfers through PayID and pre-approved debits via PayTo.

PayID works by letting you use your mobile number, email address, Australian Business Number (ABN) or organisation identifier to receive fast payments to your bank account. You can have multiple PayIDs, each linked to a different account.

PayTo is different. It works via one-time authorisation, where the consumer allows a business to draw from their account, up to a certain amount and time period. Think of it as real-time payments for recurring payments, such as Spotify, Netflix or gym memberships.

Australia has more than 27 million registered PayIDs, with more than 5 million daily transactions.

How to save Australians millions a year

With PayID and PayTo, money lands in a business’s account instantly. The cost is tiny, projected to fall to four cents a transaction by this year.

Every day, Australians make roughly 45 million card transactions. If even some of those transactions shifted to PayID or PayTo, small businesses could save millions in fees – and customers would be spared a big share of that $1.2 billion in card surcharges.

However, a 2025 Nielsen/Westpac survey found that while 99% of Australian business leaders recognised the need to move to real-time payments, only 25% had started that transition.

Why are real-time payments part of daily life in some countries, but not here? Preliminary research points to one factor above all: the central bank’s role. In Australia’s case, that would mean the Reserve Bank stepping in to do more.

Instead of spending so much time and resources on card surcharges, the Reserve Bank should do more to boost the use of real-time payments.

Are real-time payments riskier?

Real-time payment QR codes overseas are secure, and businesses do not see or retain the customer’s phone number or email.

Unlike card payments, there is no risk of losing your card or card numbers. A payment can only be made via scanning a QR code and authorising it.

Of course, risks remain. Whether using a card or a real-time payment, being aware of the risks of fraud or scammers remains important.

The Australian Banking Association has recommended more Australians use PayID to protect themselves from scams or mistaken payments.

Cutting costs for shoppers and business

Australian small businesses currently get a raw deal. The Reserve Bank says they’re often charged between 1-2% on every transaction, around three times what the big chains pay.

No wonder many end up adding surcharges to cover their costs.

We already have the tools to make real-time payments an option for everyday shopping. Unlike overseas, that option is still rarely offered at the checkout.

A faster, cheaper way to pay than with cards is possible. It’s time to use it.The Conversation

Vibhu Arya, PhD Student, UTS Business School, University of Technology Sydney; Renu Agarwal, Professor, Strategy, Operations and Supply Chain Management, University of Technology Sydney, and Wen Helena Li, Senior Lecturer, UTS Business School, University of Technology Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Inflation rise reduces chances of Reserve Bank rate cut

Inflation spikes, drastically reducing chances of a Reserve Bank rate cut amid economic pressures and rising costs

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Inflation spikes, drastically reducing chances of a Reserve Bank rate cut amid economic pressures and rising costs

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In Short:
– Rate cut likelihood by the Reserve Bank has decreased due to a rise in annual inflation to 3.2 per cent.
– Significant price increases in housing, recreation, and transport are raising concerns for the Reserve Bank.

The likelihood of a rate cut by the Reserve Bank has decreased significantly after a surge in annual inflation.

The Australian Bureau of Statistics reported that inflation for the year ending September rose to 3.2 per cent, reflecting a 1.1 per cent increase.

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Trimmed mean inflation, a crucial measure for the Reserve Bank, was recorded at 1 per cent for the quarter and 3 per cent for the year. The bank anticipates inflation to reach 3 per cent by year-end, while trimmed mean inflation is expected to slightly decrease.

The quarterly rise of 1.3 per cent in September exceeded expectations. Governor Bullock noted that a deviation from the Reserve Bank’s projections could have material implications.

Financial markets reacted promptly, with the Australian dollar rising against the US dollar, while the ASX200 index fell.

The most significant price increases were observed in housing, recreation, and transport, indicating widespread price pressures that concern the Reserve Bank.

Despite the unexpected inflation rise, some economists believe the Reserve Bank may still consider rate cuts in December, viewing current price spikes as temporary due to the winding back of subsidies.

Economic Pressures

Broad-based economic pressures suggest that the Reserve Bank may not reduce interest rates at its upcoming meeting. Analysts highlight the need for ongoing support for households facing cost-of-living challenges.


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Money

Wall Street hits record highs on low inflation

Wall Street hits record highs on cool inflation and strong earnings ahead of key Federal Reserve interest rate decision

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Wall Street hits record highs on cool inflation and strong earnings ahead of key Federal Reserve interest rate decision

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In Short:
– U.S. stocks rose to record highs on Friday due to lower inflation and strong corporate earnings.
– Key earnings reports from major companies are expected next week, influencing market trends.
U.S. stocks rose to record highs on Friday due to lower-than-expected inflation data and positive corporate earnings.The S&P 500 and Nasdaq achieved their largest weekly gains since August. The Dow saw its biggest jump from Friday to Friday since June.

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The Labor Department reported that the Consumer Price Index was slightly cooler than analysts’ predictions, easing concerns about inflation impacts from tariffs. This development suggests a likely interest rate cut by the Federal Reserve at its upcoming meeting.

Ryan Detrick from Carson Group noted the positive inflation news may facilitate forthcoming Fed rate cuts. Despite the ongoing government shutdown affecting data releases, this CPI report provided much-needed clarity.

Earnings reports are continuing, with 143 S&P 500 companies having reported results. Growth expectations for third-quarter earnings have risen to 10.4%. Detrick indicated a strong opening to the earnings season with a significant percentage of companies exceeding expectations.

This coming week, key earnings will be reported from Meta Platforms, Microsoft, Alphabet, Amazon, and Apple, alongside industrial companies like Caterpillar and Boeing.

The Dow rose 472.51 points to 47,207.12. The S&P 500 increased by 53.25 points to 6,791.69, while the Nasdaq gained 263.07 points, reaching 23,204.87.

Alphabet gained 2.7% following a deal expansion with Anthropic. Coinbase saw a 9.8% increase from a JPMorgan upgrade. In contrast, Deckers Outdoor’s shares fell 15.2% after lowering sales forecasts.

Market Trends

Advancing stocks on the NYSE outnumbered decliners by 2.18 to 1. The S&P 500 had 34 new highs, with the Nasdaq recording 124.

Trading volume was 19.04 billion shares, lower than the average of the past 20 days.


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US stocks face tests from Tesla, Netflix earnings

US markets brace for Tesla and Netflix earnings amid rising volatility and delayed inflation data

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US markets brace for Tesla and Netflix earnings amid rising volatility and delayed inflation data

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In Short:
– Earnings reports from Tesla and Netflix might affect U.S. stock performance next week amid high inflation concerns.
– Increased market volatility arises from U.S.-China trade tensions and fewer S&P 500 stocks in an uptrend.
This coming week, earnings reports from companies including Tesla and Netflix are anticipated to impact U.S. stock performance.
Investors are also awaiting delayed U.S. inflation data, which could test market stability as it remains near record highs.Recent trading activity has shown increased volatility, influenced by ongoing U.S.-China trade tensions and concerns regarding regional bank credit risks. The CBOE volatility index has seen a rise, indicating increased market uncertainty.

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The S&P 500 entered its fourth year of growth amidst these fluctuations, having previously experienced a period of calm. Experts suggest market risks are intensifying as valuations reach peak levels.

Market Volatility

Concerns regarding U.S.-China trade relations escalated last week when the U.S. threatened to raise tariffs by November 1 over China’s rare-earth export policies. President Donald Trump is scheduled to meet with President Xi Jinping in two weeks to discuss these issues.

Despite these challenges, major stock indexes gained ground over the week, with the S&P 500 up 13.3% year-to-date. However, a noticeable decline in the number of S&P 500 stocks in an uptrend raises caution among investors about underlying market weaknesses.

The upcoming third-quarter earnings will be closely monitored, especially as the government shutdown halts economic data releases. Companies like Procter & Gamble, Coca-Cola, RTX, and IBM are due to report. The delayed U.S. consumer price index is also expected to provide crucial insights ahead of the Federal Reserve’s monetary policy meeting on October 28-29.


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