Wednesday 30 July 2025

Topics: Gaza, surcharge changes

E&OE.......................

‍

STEPHEN CENATIEMPO: Before we get onto this issue, I just do want to talk about Israel for a moment. As somebody that still talks to people on the ground over there, there's a lot of talk about aid supplies into Gaza. Now I've seen a video this morning of Hamas terrorists hijacking aid supplies that are coming from the UN. The rhetoric from the government at the moment is well, it's probably the strongest anti-Israel rhetoric we've seen in the last 20 months.

DAVE SHARMA: Good morning, Stephen. Great to join you.

STEPHEN CENATIEMPO: Before we get onto this issue, I just do want to talk about Israel for a moment. As somebody that still talks to people on the ground over there, there's a lot of talk about aid supplies into Gaza. Now I've seen a video this morning of Hamas terrorists hijacking aid supplies that are coming from the UN. The rhetoric from the government at the moment is well, it's probably the strongest anti-Israel rhetoric we've seen in the last 20 months.

DAVE SHARMA: Look, I think it's, it's a difficult situation in Gaza. Undoubtedly Hamas is commandeering a lot of the supplies. But I think it's also true that there's not enough food reaching the civilian population of Gaza right now. Now whether you can believe all the images you're seeing, I don't know. I'm not on the ground or close enough to know. But I think there's enough credible people warning that there's not enough food reaching Gaza and that something needs to be done to address it. And I think, you know, Donald Trump's recognised that overnight. I think Israel has now taken steps to basically make sure more food is delivered in there. Hamas bears a huge responsibility for this situation of course, because they continue to hold the hostages, they continue to reject any ceasefire deals. But that said, I think we need to make sure that the civilian population of Gaza is not paying the full entirety of the price for Hamas in transitions.

STEPHEN CENATIEMPO: Alright, let's talk about these, uh, tap and go fees. Um, look, I have railed against it probably for the last two decades that banks once upon a time provided a service, now they charge us to use our own money. Um, the concern I have with the government's policy here is, as I said, businesses are going to have to absorb this because it's the business that's being targeted, not the banks.

DAVE SHARMA: Well, look, if you'd actually look at what the Reserve bank is suggesting to do, is to reduce what's called the interchange fees or the, basically the wholesale fees that are charged to the business for allowing an electronic transaction. And I don't know if you've noticed this, but overwhelmingly it's probably small businesses rather than big retailers that charge you for the tap and go. So if you go into your weekly shop, you're probably not paying a Card fee. But if you're buying a coffee or a lunch, you might be. And that's because basically small business has not been able to negotiate the big discounts with the card suppliers and card providers and banks that big business has. So the RBA has found that a small business is probably paying about three times as much for an interchange fee. This is the wholesale cost of processing a transaction versus big business. And so what they're suggesting is they're going to mandate reduction in those wholesale costs, which means that small business won't have to absorb the fee, and as a result they're not going to have to pass it on to their consumer in the same way.

STEPHEN CENATIEMPO: But it just becomes overbearing because, I mean, once upon a time banks used to handle cash. Now they charge a cash handling fee to discourage businesses from using cash. But then when you don't use the cash, they then charge you a fee for using, uh, electronic funds transfer. I mean, it's almost like we're stuck between a rock and a hard place. And the only winners here are the big banks.

DAVE SHARMA: I think overwhelmingly, look, it's the banks and the card service providers, if you like, the Visas and the mastercards and the amexes of the world that are basically making the money here. And I think it's preposterous, as you say, that we should be charged, for using our own money. And when someone, you know, when we buy a good from someone, we're also going to be charged for the privilege of buying that good in addition to buying the price. And I think the comparison with cash is a valid one because, I don't think any of us would accept a cash payment fee if we went to a business or something like that. But cash costs less, costs more rather to manage through the system versus an electronic transaction where you basically, once you've built the infrastructure, you're just moving a few electrons and a few bytes of data from, you know, one ledger to another.

STEPHEN CENATIEMPO: You wonder what the Banking Royal Commission was all about in the end. It highlighted a lot of problems, but I don't think we're any better off than we were beforehand.

DAVE SHARMA: Well, I don't think consumers are better off and I think the Banking Royal Commission made some important findings, but I think a lot of the response to it, the regulations and whatnot, has basically come at the expense of consumer choice and some points at the expense of, you know, the quality of goods that consumers receive.

STEPHEN CENATIEMPO: Dave, great to talk to you. I appreciate your time.

DAVE SHARMA: Thanks.

[ENDS]