SYDNEY, April 1, 2026, 05:09 AEDT
Australia will ban surcharges on debit and credit card payments routed over eftpos, Visa and Mastercard from Oct. 1, after the Reserve Bank of Australia decided the fee model had become opaque and no longer worked as intended. The RBA said consumers currently pay about A$1.6 billion a year in those charges, and businesses should save about A$910 million annually from the broader fee overhaul. 1
The move matters now because cost-of-living pressure has become a central issue for households and politicians, while cards account for about three-quarters of Australian payments. Around 16% of businesses still levy surcharges, so the RBA and the government are pushing for all-in prices at the shelf or checkout instead of an extra fee at the end. 2
That shift is meant to do more than tidy up receipts. The central bank said surcharging no longer steers consumers toward cheaper payment methods because many merchants now charge the same fee across cards, the rules are hard to follow and the surcharge is often poorly disclosed; 76% of consumers in its survey said the practice should stop. 3
Alongside the ban, the RBA will cut consumer credit-card interchange fees – the wholesale charges built into merchants’ card-payment bills – to 0.3% of a transaction from 0.8%. The debit and prepaid cap will fall to 8 cents or 0.16%, while a 1% cap on foreign-issued cards and some disclosure rules for networks and large acquirers will begin on April 1, 2027. 2
Treasurer Jim Chalmers said people should not be punished for using a debit or credit card, casting the package as a cost-of-living measure. The RBA said the review began in October 2024 and drew more than 260 written submissions and around 150 meetings with industry, government and business groups. 4
Consumer advocates welcomed it. CHOICE’s Morgan Campbell called card surcharges “a product of another time”, while Canstar’s Sally Tindall said Australians had had enough of “an extra hit at the till.” 5
Some payments firms see commercial upside as merchants shop around more aggressively. Tyro CEO Nigel Lee called the reforms “a win for consumers” and for small businesses, and said clearer pricing should make it easier for merchants to compare providers in a market that has relied heavily on bundled or opaque pricing.
But the savings will not fall evenly or immediately. The Australian Banking Association said banks may claw back lost revenue through higher card fees, shorter interest-free periods or weaker rewards programs, and chief executive Simon Birmingham said the lower interchange caps would “not lower costs for business.” 1
Hospitality groups have made a similar argument, saying cafes, pubs and restaurants may simply fold payment costs into menu prices. The RBA said shoppers at merchants that already surcharge should still pay broadly similar total amounts, just through the sticker price rather than a late-added fee, and it expects any inflation effect from rounding up prices to be negligible. 6
The overhaul also leaves unfinished business. American Express remains under a separate arrangement for now, and the RBA said it plans a fresh consultation in mid-2026 on mobile wallets, three-party card networks, buy-now-pay-later providers and e-commerce platforms. 1
