One of Australia’s most unpopular hidden fees is set to be abolished, though households are not expected to keep the full $1.6 billion in savings.
Today, the Reserve Bank of Australia released its long-awaited review into merchant card payment costs and surcharging. As part of three major changes, the central bank announced it will remove surcharges on debit, prepaid and credit card payments across the eftpos, MasterCard and Visa networks.
Instead, businesses will be required to include all costs — including credit card processing fees — in the advertised price, meaning the sticker price will be the final price consumers pay.
Currently, Australians pay around $1.6 billion in card surcharges each year, while businesses pay about $200 million in fees to card providers. The Reserve Bank said the current surcharge system, introduced more than 20 years ago, is no longer achieving its original goal of encouraging consumers to choose more efficient payment methods.
“When card surcharges end, the sticker price will be the price that consumers end up paying. Consumers will no longer be surprised at the checkout by an unexpected surcharge for paying by card,” the RBA said in a statement.
The Reserve Bank said the changes are unlikely to significantly reduce cost-of-living pressures, although it acknowledged some businesses may attempt to recover surcharge costs through higher prices. The removal of surcharges will take effect from October 1, 2026.
Another reform will reduce the fees businesses pay to card networks. The interchange cap for domestic consumer credit card transactions will be cut from 0.8 per cent to 0.3 per cent. The RBA estimates this will save businesses about $910 million and says it will monitor the system to ensure payment providers do not simply absorb the savings.
These business fee changes will also begin on October 1, 2026, while a new interchange cap on foreign cards will be introduced six months later, on April 1, 2027.
RBA Governor Michele Bullock said the reforms should help reduce card payment costs for businesses, particularly small businesses, which often face higher fees to accept card payments.
“Of the 16 per cent of Australian businesses that surcharge, it will be up to them to choose whether to include payment costs in their sticker prices when surcharging ends, just as they do with other costs,” the RBA said.
Finally, the RBA will increase transparency around card payment fees by requiring eftpos, MasterCard and Visa to publish the fees they charge, making it easier for businesses to compare providers.
