Reserve Bank hands down card surcharge decision – BeanScene

The Reserve Bank of Australia (RBA) has published its Review of Merchant Card Payment Costs and Surcharging, with reforms now set to be introduced to remove surcharges on debit, credit, and prepaid cards on networks including Mastercard, Visa, and eftpos.

The RBA expects the ban to save consumers about $1.6 billion in surcharge fees annually, with businesses also slated to save $200 million in surcharge fees each year.

The key decisions of the Payment Systems Board (PSB) as part of the review led with the removal of surcharging – the framework of which was introduced more than 20 years ago – as it is “no longer achieving its intended purpose of steering consumers towards making more efficiency payment choices”, with the removal of surcharges to “make card payments simpler, more transparent, and increase competition among payment service providers”.

The interchange fees paid by Australian business have also been recommended to be capped, with the expectation that this would lower businesses’ costs when they accept domestic or overseas card payments.

The RBA says small businesses “should benefit the most” from this, as “they tend to pay fees closer to the existing caps”.

Transparency over the fees charged by card networks and payment service providers will also aim to strengthen competition and “put downward pressure on card payment costs”.

Most of these changes will come into effect on 1 October 2026, including the removal of surcharging and reductions in the interchange caps for domestic card transactions.

The introduction of an interchange cap on foreign cards and some changes to payment cost transparency will be introduced on 1 April 2027.

Speaking to BeanScene last year, CEO of the Australian Restaurant and Café Association (ARCA), Wes Lambert said the removal of card surcharges would raise costs, rather than cut them.