Australia’s largest bank, the Commonwealth Bank of Australia (CBA), has made a bold call for the Reserve Bank of Australia (RBA) to eliminate surcharge fees on debit and credit card payments.
The move, if implemented, could relieve consumers of nearly $1 billion in annual costs and bring Australia’s payment practices in line with those of Europe and the UK, where such fees are already banned.
In its submission to the RBA, CBA argued that surcharge fees should be outlawed entirely. The bank emphasised that banning these fees is the simplest and most equitable solution to address the widespread inequality they create.
Surcharge fees, which are additional charges merchants impose on consumers who use credit or debit cards for payments, can vary significantly.
While these fees are intended to cover the cost of processing payments, they often result in inconsistent and, at times, excessive charges for consumers.
CBA’s submission highlighted that although surcharge disclosures are mandated, they are inconsistently implemented and challenging to oversee.
“There are no standardised practices ensuring customers are informed of the surcharge before completing a payment—many only discover the charge after tapping to pay,” the submission stated.
The bank argued the simplest solution for both merchants and consumers is to abolish these fees entirely.
“This approach eliminates the need to monitor or enforce unlawful surcharging practices,” CBA stated.
An RBA report reveals that an eftpos transaction costs businesses an average of 30 cents for a $100 purchase, equating to 0.3%, compared to an average of 0.5% for Visa and MasterCard debit transactions.
For credit cards, Visa and MasterCard transactions average 0.9%, while American Express and Diners Club are the most expensive, with average costs of approximately 1.3% and 1.7%, respectively.
The Albanese government has already moved to address these costs by planning to eliminate surcharges on debit purchases starting in 2026, pending the RBA’s review.
However, CBA cautioned that restricting the ban to debit charges would leave credit card users grappling with the same challenges of fee transparency and enforcement.
It could also expose them to higher costs if merchants attempt to offset losses from debit transactions.
“This approach would fail to alleviate the complexities of managing disclosure, customer experience, or enforcement,” CBA stated. “Furthermore, it is highly likely to encourage business practices that distort the market further, ultimately disadvantaging customers.”
The government has also initiated measures to ensure Australians can use cash for essential purchases by releasing a consultation paper.
The proposal would require businesses to accept cash for essential items, though small businesses are expected to be exempt.
“For many Australians, cash is more than just a payment method—it’s a lifeline. Mandating cash for essential purchases ensures those who depend on it won’t be left behind,” Assistant Treasurer Stephen Jones previously stated.
