What Is the RBA’s Proposal on Card Surcharges?
The Reserve Bank of Australia (RBA) has announced a landmark proposal to eliminate surcharges on credit and debit card transactions — including EFTPOS, Visa, and Mastercard payments. This initiative forms part of the RBA’s broader review of merchant payment costs and aims to make the payment system more efficient and cost-effective for consumers.
By removing these surcharges, the RBA estimates Australian consumers will save up to $1.2 billion annually starting from July 2026. The changes will be implemented under the RBA’s existing regulatory powers after a public consultation period.
Key Objectives of the RBA Card Surcharge Removal
The main goals of this proposal are:
- Reduce costs for consumers: Ending card surcharges means consumers won’t pay extra fees when using credit or debit cards for everyday purchases.
- Enhance payment system transparency: The RBA is also proposing to lower interchange fee caps and require card networks to publicly disclose their fee structures.
- Improve payment efficiency: Simplifying payment costs will streamline transactions and reduce confusion over fees.
Impact on Businesses and Small Enterprises
While consumers stand to benefit significantly, there are concerns about the potential impact on businesses, particularly small and medium enterprises (SMEs).
- Some businesses fear losing the ability to pass on card payment fees to customers, potentially increasing their operational costs.
- However, the RBA highlights that lowering interchange fees will mainly benefit small businesses by reducing their overall payment costs.
- The RBA emphasizes balancing consumer savings with business viability in the new payment system framework.
Industry and Consumer Reactions
The proposal has received mixed reactions across different sectors:
- Consumer advocates applaud the move, citing it as a major win for reducing unnecessary payment fees.
- Business groups in industries like hospitality express concerns about absorbing costs that were previously offset by surcharges.
- Some experts suggest this change could encourage more transparent pricing and competition in the payment industry.
Next Steps: Consultation and Implementation Timeline
The RBA is currently inviting feedback from stakeholders, including merchants, payment providers, and consumers. The consultation period will help refine the proposal before final decisions are made.
- The final decision is expected by the end of 2025.
- Implementation of the new rules, including the removal of card surcharges, is planned for July 2026.
- The RBA remains committed to ensuring a competitive, transparent, and efficient payment system for all Australians.
Why This Matters for Australian Consumers and Businesses
Removing card surcharges is a significant step toward making payments fairer and more transparent in Australia. Consumers will enjoy savings on everyday purchases, while businesses, particularly SMEs, will benefit from reduced interchange fees.
This reform highlights Australia’s move towards a modern, competitive payment landscape that balances the interests of consumers and merchants alike.
