Australia is looking to curb credit card costs to help businesses but that comes at the cost of frequent flyer points and Qantas bottom line.
What the RBA estimates exclude are the notion that business owners will pass on that savings to consumers. Perhaps they will, but I suspect they will not. In businesses where they give a cash payment discount, this will help consumers directly in a material way, but for those who do not ad a credit card surcharge and absorb the cost will benefit but consumers will not. Additionally, with credit card points then becoming more expensive for issuers consumers will see earning rates cut indirectly adding cost to the consumers.
One could argue, this is transferring the cost of those points from small business owners back to consumers using the cards, but the notion of savings by the RBA study is entirely unfounded. It’s based on current market behavior, not future consumer and business behavior when all of the rules have changed.
A great solo travel tip spotted this week on Live and Let's Fly.
