The Reserve Bank of Australia (RBA) has announced a ban on card surcharges for eftpos, Mastercard, and Visa networks, effective October 1st. This decision concludes a months-long public review and aims to eliminate what the RBA considers an inefficient and opaque practice. The RBA estimates that this change will save Australian consumers approximately A$1.6 billion each year.
However, some banks and businesses have cautioned that they may need to recoup these lost surcharge revenues through alternative means. The RBA stated that the increasing prevalence of businesses applying the same surcharge rate to all cards, difficulties in enforcing the current surcharging framework, and decreased cash usage have diminished the effectiveness of the existing surcharging system.
The RBA also intends to cap interchange fees for credit cards, charged by banks, at 0.3% of the transaction value, a significant reduction from the current 0.8%. This measure is projected to reduce costs for businesses by around A$900 million annually, although it may negatively impact bank revenues. American Express has a separate agreement with the RBA, which will be subject to a new review starting in mid-2026, encompassing regulations for mobile wallets, three-party card networks, ‘buy-now, pay later’ services, and e-commerce platforms.
While a survey indicated that approximately 75% of Australian consumers viewed surcharging as unnecessary, the Australian Banking Association (ABA) has expressed concerns that consumers may face increased card fees, higher interest rates, and reduced interest-free periods as a result. The Australian Restaurant & Cafe Association also reacted negatively, claiming the changes would force businesses to raise menu prices to cover merchant fees.
