RBA reforms changing the rewards landscape - Compare The Market

RBA reforms changing the rewards landscape

 
 
 
 
 

We love to be rewarded for spending, especially when we work hard for our money all week long. However, comparethemarket.com.au says that Aussie shoppers may see less value in their current reward schemes, as banks need to comply with new rules set by the Reserve Bank of Australia (RBA).

Rewards are funded by a number of sources, but in the traditional banking environment, rewards are primarily funded by fees paid between the customer’s bank and the bank of the business where the purchase is being made, known as interchange fees. The RBA have lowered the caps of these interchange fees, meaning they have reduced funds to pay for the card benefits in their rewards programs.

Customers may find they are earning fewer points when they spend, and receiving less value when redeeming points.

Comparethemarket.com.au is alerting Australians that they can expect to be impacted if they are with Visa, MasterCard, and American Express companion cards issued by the banks. Australians with cards issued directly by American Express should not be concerned as these cards are not included in the regulation.

Robert Gunning, Director of Public Affairs and Communications for American Express Australia and New Zealand said:

“A number of cards have already had their rewards devalued, due to changes that Visa and MasterCard made to their interchange rates in November 2015. It’s not unreasonable to assume that less interchange revenue in the future to pay for rewards programs will mean further devaluation.”

“Consumers should be vigilant and take a good look at the value they’re now getting from their rewards program” Mr Gunning says.

Another key change the RBA have announced relates to credit card surcharges. Starting from September this year, any large business that wants to apply a credit card surcharge can only surcharge what it’s actually costing them to process that transaction.

“This will see an end to customers having to pay surcharges that are higher than what the business is being charged to accept their credit card. Customers should see an end to excessive surcharges when they choose to pay with their credit cards,” says a spokesperson for comparethemarket.com.au.

Comparethemarket.com.au has compiled four top tips for consumers and businesses to prepare for the RBA changes:

  1. Be vigilant and pay attention to changes in your rewards programs: It’s always worthwhile to check in to see if you’re getting the value you signed up for. If you’re not getting this value, it may be time to look around at other offers suited to your needs.
  1. Visa, MasterCard and bank issued American Express Cards will be impacted: Additionally, any business who is currently applying a surcharge to credit card payments that is in excess of what it is costing them to process that transaction will be impacted by the changes.
  1. Rewards points for air miles: Air mile points represent excellent value and co-branded cards with airlines often attract great sign up offers which many people take advantage of. However, what Aussies need to be aware of, is not just the rate at which you earn your points, but the value of those points when it comes time to redeem them. If someone experiences devaluation to their rewards program in the future, the amount of points they currently need to get to Los Angeles, for example, may in the future only get them to Fiji. Consumers need to be aware not just of earn rates when they sign up for a credit card, but the redemption rates.
  1. American Express rewards are still applicable: The new regulations don’t apply to cards issued by American Express. The ongoing rewards American Express still provides include:

– Allowing customers to use points to pay for any transaction via the American Express app for iPhone and Android

– Using the app based game “Local Champion”, which rewards customers with bonus points for being the most frequent spender at the businesses they love. Users earn an additional bonus point per dollar spent at retailers where they shop the most.

– Members of American Express’ Membership Rewards Ascent program receive one airline mile for every point they have when they redeem

– Customers doing weekly shops with the Platinum Edge card in Coles or Woolworths will earn three Membership Reward points for every dollar spent

For further information, or for an interview, please contact:
Hannah Twiggs, PR Assistant, comparethemarket.com.au
Tel: 07 3377 8879
Email: hannah.twiggs@comparethemarket.com.au

About comparethemarket.com.au
Comparethemarket.com.au is a comparison website that makes it easier and quicker for Australians to compare and buy products and services they rely on in their everyday lives. Whether you’re looking for a good deal on your car insurance, health cover for you and your family, the lowest fuel prices in your area, or an energy provider that suits your needs, then go to comparethemarket.com.au. It’s a completely free service and enables Australians to make purchasing decisions with greater knowledge, confidence and savings. 

Author comparethemarket.com.au

Launched in September of 2012, Comparethemarket.com.au – operated by Compare the Market Pty Ltd (CTM) – has teamed up with a range of Australia’s insurance providers so you can compare some of the latest deals, in one place, side-by-side. The team behind comparethemarket.com.au have experience in insurance, comparison, customer service and digital. If this was a stuffy corporate monologue, we’d tell you that we’re a bunch of subject matter experts specialising in User Experience, Customer Insights & Online Strategies. But to be honest, it’s just as accurate (and a whole lot easier) to say that we’re a bunch of people who want to make your experience with online comparison better. We pride ourselves on the fact that we’re forward-thinking, that we share an entrepreneurial spirit, and the fact that we like to have a bit of a laugh too. We’re all a bit too addicted to chocolate, but no one’s perfect, really.

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