RBA abolishes card surcharging, cuts interchange fees
The Reserve Bank of Australia has published its final decisions on merchant card payment costs, including the removal of surcharging and a reduction in interchange fees. Most changes will take effect on October 1, 2026.
Towards simpler, fairer payments
The Payments System Board (PSB) of the Reserve Bank of Australia (RBA) has concluded that a package of reforms, encompassing the removal of surcharging, reduced interchange fees, and increased transparency, will enhance competition and efficiency in the payments system.
Surcharging on debit, prepaid, and credit cards across eftpos, Mastercard, and Visa networks will be eliminated.
This decision stems from the surcharging framework no longer achieving its original goal of guiding consumers towards efficient payment choices, evidenced by widespread uniform surcharging, enforcement difficulties, and declining cash usage.
Removing surcharging is expected to simplify card payments, boost transparency, and foster greater competition among payment service providers.
Additionally, it aligns with consumer preferences for payment costs to be integrated into advertised prices.
Lowering caps on interchange fees paid by Australian businesses is also expected to reduce their operational costs, particularly benefiting small businesses that often pay fees closer to existing limits.
Phased implementation and future focus
Most of the announced changes, including the removal of surcharging and reductions in interchange caps for domestic card transactions, are scheduled to come into effect on October 1, 2026.
More complex adjustments, such as the introduction of an interchange cap on foreign cards and certain payment cost transparency enhancements, will be implemented later, on April 1, 2027.
This phased approach aims to provide the payments industry with sufficient time to adapt to these significant reforms.
The RBA also plans to initiate a public consultation in mid-2026 to evaluate the public interest case for regulating other areas of the retail payments system not covered in this review, including mobile wallets, three-party card networks, 'buy-now, pay-later' services, and e-commerce platforms.
A decisive move for payment fairness
This reform package marks a significant step towards modernizing Australia's retail payments landscape, addressing long-standing issues of transparency and fairness for consumers and businesses.
While the removal of surcharging simplifies transactions, the true impact will depend on how effectively reduced interchange fees translate into lower overall costs.
The RBA's proactive approach signals a clear commitment to fostering a more competitive and efficient payment ecosystem for the future.