The Reserve Bank of Australia (RBA), the central bank of the country, is set to end surcharges on most debit and credit card payments for consumers from October 2026.
The move comes after the RBA published a Conclusions Paper detailing the Payments System Board’s (PSB) decisions on the Review of Merchant Card Payment Costs and Surcharging.
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The PSB decided to remove surcharging on debit, prepaid and credit card transactions on the designated EFTPOS, Mastercard and Visa card networks.
“The surcharging framework, introduced more than two decades ago, is no longer achieving its intended purpose of steering consumers towards making more efficient payment choices,” the statement added.
The RBA cited several factors behind the change. These include more businesses applying a single surcharge rate across card types, difficulties in enforcing the current rules, and reduced cash usage by consumers.
The central bank added that removing surcharging would make card payments “simpler, more transparent and increase competition among payment service providers”.
American Express operates under a separate agreement with the RBA and is not subject to this rule change.
The PSB also decided to reduce the caps on interchange fees paid by Australian businesses. The RBA said these changes are expected to lower merchant costs for accepting domestic and overseas card payments. The central bank noted that small businesses are likely to benefit most, as they often pay fees closer to the current caps.
According to a Reuters report, these changes are expected to deliver savings of about A$1.5bn ($1.03bn) annually.
In addition to the surcharging and interchange changes, the PSB decided to increase transparency around fees charged by card networks and payment service providers. The RBA said improved transparency is designed to strengthen competition within the payments chain, put downward pressure on payment costs, and make it easier for businesses to compare providers.
Most measures will take effect on 1 October 2026. This includes the removal of surcharging and the reduced interchange caps for domestic card transactions.
A new interchange cap on foreign cards, along with some transparency measures, will be implemented later on 1 April 2027. The RBA said the later start date is intended to give the payments industry time to deliver more complex changes.
The RBA also plans to launch a separate public consultation in mid-2026.
This will assess whether additional regulation is in the public interest for areas not covered in the current review. These include mobile wallets, three-party card networks, buy-now pay-later services, and e-commerce platforms.
