Australia’s major banks have escalated their long-running battle with global tech and credit card companies, accusing Apple, Visa and Mastercard of “free-riding” on investments in the nation’s payment infrastructure.

In a submission to a parliamentary inquiry, the Australian Banking Association (ABA) argued that international companies benefit from Australian banks’ investments in security, fraud control and dispute resolution, while shouldering far fewer obligations.

The parliamentary review is examining whether Apple, Google, Visa, Mastercard and American Express should face tighter regulation.

Banks contend that fees for services such as Apple Pay are largely outside the Reserve Bank of Australia’s (RBA) regulatory reach, leaving them responsible for billions in costs while international platforms profit.

Under RBA proposals, interchange fee revenue, which banks earn when customers use credit cards, would drop by nearly $1 billion, further widening the gap between domestic institutions and global tech firms.

Australian businesses currently pay about $7.3 billion annually in payment fees on $1.1 trillion of goods, with around $2 billion flowing to Visa and Mastercard schemes alone.

Banks say lower interchange fees would make credit card transactions unprofitable, particularly as payments routed through Apple Pay consume roughly half of the proposed cap, leaving only 0.15% for all other system costs.

The Independent Payments Forum warned that cutting fees would still leave $6 billion in payments system costs unrecovered.

RBA Governor Michele Bullock told parliament the review will be released by the end of March and confirmed the central bank has new powers to regulate platforms including American Express, mobile wallets, buy-now-pay-later services and e-commerce providers.

The inquiry also flagged emerging technology-driven costs, such as AI shopping assistants, which already levy fees – for example, Shopify merchants pay OpenAI 4% on sales via ChatGPT, in addition to platform fees.