The Reserve Bank has announced it will ban card surcharges on eftpos, Visa and Mastercard payments from October 1, removing an estimated $1.6 billion in annual fees so consumers pay only the sticker price. Here’s what you need to know.
Key Takeaways
- The Reserve Bank of Australia will ban surcharges on eftpos, Visa and Mastercard payments from October 1, 2026.
- The changes will remove an estimated $1.6 billion in annual surcharges paid by consumers.
- Interchange fee caps will be reduced for both domestic and international card transactions.
- American Express cards are not included in the ban and will be reviewed separately.
- Additional transparency requirements will be introduced for payment service providers. Further reforms will take effect from April 1, 2027.
Key Background
Surcharging was introduced in the early 2000s to encourage consumers to choose lower-cost payment methods, particularly debit over credit.
The Reserve Bank said the framework has become less effective as card payments now dominate transactions and surcharges are frequently applied at flat rates regardless of underlying costs. It also cited difficulties in enforcement and inconsistent disclosure to consumers.
Under the new rules, merchants will no longer be able to apply a surcharge at the point of sale. Payment processing costs will instead be incorporated into overall pricing.
To support the transition, the Reserve Bank will lower interchange fee caps and introduce measures requiring payment service providers to give businesses clearer, standardised information on fees, allowing easier comparison between providers.
The central bank estimates the combined changes will reduce merchant payment costs by about $910 million per year, with smaller businesses more likely to benefit as they typically pay rates closer to existing caps.
Big Number
$1.6 billion: Annual card surcharges paid by consumers
Crucial Quote
“Surcharging no longer works as intended,” said RBA Governor Michele Bullock.
Want to see more Forbes articles on your feed? Tap here to make Forbes Australia a preferred source on Google.
Look back on the week that was with hand-picked articles from Australia and around the world. Sign up to the Forbes Australia newsletter here or become a member here.
