Media Release Review of Merchant Card Payment Costs and Surcharging – Conclusions Paper

The Reserve Bank of Australia (RBA) has today published a Conclusions Paper which sets out the final decisions of the Payments System Board (PSB) on the Review of Merchant Card Payment Costs and Surcharging. The PSB has concluded that a package of reforms that includes removing surcharging, reducing interchange fees and increasing transparency would be in the public interest and promote competition and efficiency in the payments system. This follows an extensive public consultation process since the release of a Consultation Paper in July 2025, which sought stakeholder feedback on the PSB’s preliminary policy proposals.

The key decisions of the PSB include:

• removing surcharging on debit, prepaid and credit cards on the designated eftpos, Mastercard and Visa card networks. The surcharging framework, introduced more than two decades ago, is no longer achieving its intended purpose of steering consumers towards making more efficient payment choices. The increased prevalence of businesses surcharging all cards at the same rate, challenges with enforcing the current surcharging framework, and consumers using less cash have reduced the effectiveness of the surcharging regime. Removing surcharging would make card payments simpler, more transparent and increase competition among payment service providers. Removing surcharging also aligns with the preference of most consumers for payment costs to be incorporated into advertised prices.
• lowering the caps on interchange fees paid by Australian businesses. These changes are expected to lower businesses’ costs when they accept domestic or overseas card payments. Small businesses should benefit the most because they tend to pay fees closer to the existing caps.
• increasing transparency over the fees charged by card networks and payment service providers to strengthen competition. Improving transparency will enhance competition between players within the payments chain, put downward pressure on card payment costs and make it easier for businesses to shop around for a better deal.

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 come into effect later, on 1 April 2027, to ensure the payments industry has sufficient time to implement these more complex changes.

The RBA plans to start a public consultation in mid-2026 to assess the public interest case for regulating areas of the retail payments system that were not covered under this Review, including mobile wallets, three-party card networks, ‘buy-now, pay-later’ services and e-commerce platforms.