The RBA will remove surcharges on debit, prepaid and credit cards on eftpos, Mastercard and Visa card networks from October 1, 2026.
The move is expected to save consumers about $1.6 billion in surcharge fees each year, with businesses saving $200 million in annual surcharge fees.
RBA Governor Michele Bullock said surcharging no longer worked as intended and consumers and businesses found the rules complex and confusing.
“Surcharges are often not well disclosed. And most consumers just want surcharging to stop,” Ms Bullock said.
“Removing surcharging will make card payments simpler, more transparent, and increase competition among payment service providers.
“It also aligns with the preference of most consumers for payment costs to be incorporated into advertised prices.”
The RBA introduced the surcharges more than two decades ago, but says it is no longer achieving its intended purpose of steering consumers towards making more efficient payment choices.
“The increased prevalence of businesses surcharging all cards at the same rate, challenges with enforcing the current surcharging framework, and consumers using less cash have reduced the effectiveness of the surcharging regime,” a statement from the RBA’s Payments System Board said.
It is hoped improved transparency will improve competition in the payments chain.
“If we remove surcharging that needs to be paired with lower payment costs for businesses especially for small businesses that pay the highest fees,” Ms Bullock said.
“So to do that the RBA is reducing caps on interchange fees that businesses pay on debit and consumer credit cards.”
The changes are expected to lower businesses’ costs when they accept domestic or overseas card payments. Small businesses should benefit the most because they tend to pay fees closer to the existing caps.
The introduction of an interchange cap on foreign cards and some changes to payment cost transparency will come into effect later, on 1 April 2027, to ensure the payments industry has sufficient time to implement these more complex changes.
“Merchants need tools so they can shop around for better deals. So we’re going to publish merchant fees to make it easier for businesses to check if they’re paying high fees,” Ms Bullock said.
“We’re also going to require payment service providers to give businesses all the information they need to get accurate quotes.”
The RBA plans to start a public consultation in mid-2026 to assess the public interest case for regulating areas of the retail payments system that were not covered under this Review, including mobile wallets, three-party card networks, ‘buy-now, pay-later’ services and e-commerce platforms.
