Surcharges on eftpos, Mastercard and Visa payments stop on 1 October, three weeks away, removing a charge that cost Australian consumers $1.6 billion last financial year.
American Express is not a designated network and is not captured by the decision, but has agreed to drop its surcharges on the same date. Diners Club, PayPal, BPAY and buy now pay later are not covered at all.
The change is not a law telling merchants to stop surcharging. The Reserve Bank's Payments System Board removed its own prohibition on card networks writing "no-surcharge" rules into their contracts, in a conclusions paper published on 31 March after more than 260 written submissions and about 150 industry meetings. Each of the three designated networks then wrote one. "The RBA does not directly regulate merchants," the bank says in its guidance, and the ACCC is equally direct: "The card networks or payment service providers are responsible for enforcing these rules, not the ACCC."
The Reserve Bank estimates 16 per cent of Australian merchants surcharged card payments on those networks in 2024-25, charging about $1.8 billion. Consumers paid $1.6 billion of it and businesses the other $200 million.
Alongside the surcharge removal, the bank has cut the interchange fees banks collect on each transaction. The cap on domestic consumer credit falls from 0.8 per cent to 0.3 per cent, and the debit cap from 10 cents or 0.2 per cent to 8 cents or 0.16 per cent. Both start on 1 October. Interchange on foreign-issued cards, until now unregulated in Australia, gets a single 1.0 per cent cap from 1 April 2027. The bank puts the reduction in what merchants pay at about $910 million a year, and the reduction in card issuer revenue at about $660 million.
Those savings do not land evenly, because the fees never did. The Reserve Bank's own figures have a small merchant on a single-rate plan paying 1.4 per cent of the transaction to accept a card, a small merchant on an unblended plan paying 0.9 per cent, and a large merchant paying 0.6 per cent. Only 19 per cent of small merchants are on unblended plans. On consumer credit, the paper records small merchants facing interchange of up to 0.8 per cent while the largest merchants get strategic rates as low as 0.18 per cent.
The bank does not claim prices will hold. "The PSB therefore anticipates that the 16 per cent of merchants that currently surcharge may increase their advertised prices," the conclusions paper says, and customers of those businesses "would pay similar amounts as they are paying now (just in a different form, via the sticker price rather than the surcharge)".
Whether the interchange cut reaches the counter is a separate question, and the answer will not be public for months. Large acquirers must start publishing average merchant service fees on 30 October. They must publish a measure of how much of the interchange cut they passed through on 30 January 2027, four months after the surcharge line disappears from the receipt. Standardised merchant statements, which will let an operator see what they are actually charged by card type and channel, are not fully required until the first full month after 1 April 2027.
Announcing the change on 31 March, Treasurer Jim Chalmers said: "People shouldn't be punished for using a credit or debit card." Reserve Bank governor Michele Bullock told a Senate estimates hearing on 4 June that the three measures together "will simplify payments for consumers and improve outcomes for businesses".
The Council of Small Business Organisations Australia has argued the sequencing is backwards. Its chair, Matthew Addison, said in April that "banning surcharging before businesses can see lower fees and understand their costs is putting the cart before the horse", and that without guaranteed pass-through "small businesses have no choice but to absorb the cost and that will ultimately be reflected in prices". COSBOA represents small business, and small business is the group the bank's own fee data shows paying the most.
The Reserve Bank acknowledged in the same paper that removing surcharges on the designated networks while capping their interchange "may provide a competitive advantage to payment methods that are not subject to the RBA's interchange regulation". Three-party schemes, mobile wallets and buy now pay later go to a separate consultation.
Some things do not change on 1 October. Weekend and public holiday surcharges, booking fees and service fees are untouched, because they are not charged for paying by card. Businesses can still discount for a particular payment method. Taxi surcharging stays with state and territory regulators. And a merchant who raises prices on 1 October and misdescribes why still answers to the ACCC under consumer law, which is where the exposure now sits.
The first acquirer fee publications are due on 30 October, and the first pass-through numbers on 30 January.
