Merchant Card Payment Costs and Surcharging – Consultation Paper –
July 2025 Transparency of Wholesale Fees

Many submissions argued that regulatory action was required to reduce the complexity and enhance the transparency of wholesale (interchange and scheme) fees. Submissions generally argued that this complexity and opacity raises challenges for PSPs in pricing and communicating their services to merchants.

Interchange fee schedules have become more complex over time. The number of interchange categories in these schedules have nearly doubled since 2020. While different interchange fees can be useful for promoting the use of secure payment methods or the adoption of new technologies, the rationale for such extensive and complex schedules is not clear.

Submissions generally supported:

• reducing the number of interchange fee categories; although the card networks argued that differentiated interchange fees are required to tailor service to the needs of members, to encourage the adoption of new technology and mitigate risks
• standardising fee categories across networks for easier comparison and promotion of competition
• requiring networks to publish aggregate interchange fees and transactions data to support cost comparisons across networks; a few submissions also suggested breaking those fees down by merchant size and card type.

Nearly all submissions that commented on scheme fees highlighted that fees set by the international card networks are opaque and complex. Card acquirers and issuers pay scheme fees to card networks such as Visa, Mastercard and eftpos for using their services. These costs are typically passed on to merchants as part of the service fees charged by PSPs. PSPs, including large financial institutions, reported difficulty understanding scheme fees and applying the correct scheme fees to individual transactions in real time, which is important for accurate least-cost routing (LCR). Common issues raised included the large number of fees, with over 100 fee categories and some transactions incurring over a dozen fees, and a lack of standardisation of fee categories across card networks. It is unclear whether such complexity is necessary. By contrast, eftpos has only two scheme fees – one for issuers and one for acquirers.

There was widespread support in the submissions to improve the transparency of scheme fees on the basis that:

• The lack of standardisation makes it hard for merchants and PSPs to compare card networks and negotiate better deals.
• Even large merchants have little visibility over the effect of scheme fees on their payment costs.
• Card networks sometimes introduce new fees with limited or no consultation. One merchant group expressed concerns that card networks sometimes mandate fees for non-critical services without the ability to opt out or to negotiate terms.
• Increased transparency can act as a constraint on further scheme fee increases.

The international card networks opposed more transparency measures. Visa and Mastercard argued that their interchange fee structures are transparent and publicly available, and that publication of aggregate data on interchange rates may lead to confusion as interchange is only one component of the cost of acceptance for merchants. They also argued that scheme fees are sufficiently clear and transparent to the issuers and acquirers that pay them via access to the scheme fee hierarchy documents (though these documents are often complex and can be as long as 800 pages) and other resources available through their online portals. The international card networks indicated that they announce the size and rationale for new fees before implementation. They argued that no further regulatory action is necessary to promote transparency.

4.1 Policy options

The PSB is considering several non-mutually exclusive options to reduce the complexity and improve the transparency of wholesale fees.

Option 1: Retain current publication requirements (status quo)

Card networks continue to be required to publish on their website their multilateral interchange fee rates or amounts (whichever is appliable) in Australia.

The RBA continues to publish aggregate industry information on issuing and acquiring scheme fees charged by the networks. No data on fees charged by individual card networks are published, since the international card schemes have refused to give the RBA permission to publish this information.

Option 2: Require each card network to publish aggregate data on interchange fees

On a quarterly basis, each card network would be required to publish more detailed data on their total interchange fees, transaction values and volumes. The data would provide a breakdown of fees for domestic and international cards, further divided into debit and credit transactions. Each category would also be split by card-present and card-not-present transactions. Additionally, fees for mobile wallet transactions would be separately listed for domestic card transactions (see Appendix D: Draft Standards – Schedule 1 in Standards No. 1 and No. 2). The card networks would be required to provide the RBA with a copy of the data, so that the RBA could republish data on its website.

Option 3: Require each card network to publish aggregate data on scheme fees

On a quarterly basis, each card network would be required to publish data on total gross issuing and acquiring scheme fees, rebates, and transaction values and volumes. The data would be split by domestic and international cards, further divided into debit and credit transactions. Each category would also be split by card-present and card-not-present transactions. Fees for mobile wallet transactions would be separately listed for domestic and international cards (see Appendix D: Draft Standards – Schedules 2 and 3 in Standards No. 1 and No. 2). The card networks would be required to provide the RBA with a copy of the data, so that the RBA could republish data on its website.

Option 4: Set an expectation that card networks work with industry to reduce the complexity and improve the transparency of their scheme fee schedules

The PSB would set an expectation that the card networks work with PSPs to address the issues that have been identified regarding the complexity and large number of scheme fees, without seeking to be prescriptive on how this is achieved. Card networks would be expected to work with PSPs to:

• reduce the complexity of scheme fee schedules where possible
• identify what information gaps exist for PSPs in understanding existing fees, and work to fill those gaps
• assess what information is necessary for PSPs to understand new fees or changes in existing fees. Additional accessible information could include items such as:
  • classification, such as whether the fee is mandatory, optional or behavioural
  • clear and detailed information regarding when the fee will apply
  • the history of changes to the level of a fee including where the fee was renamed or split.

The PSB would expect the card networks to submit, by September 2026, a clear and actionable plan outlining how they will meet this expectation. The plan should show how they have engaged with PSPs and explain how the proposed improvements will enhance transparency and support better outcomes for stakeholders. It should also include anticipated timelines and a strategy for measuring and evaluating progress.

4.2 Considerations

Several stakeholders supported additional measures to increase the transparency of wholesale fees so PSPs and merchants can better understand these costs and make more informed decisions. The current publication requirements for interchange fees are designed to help merchants understand the relevant interchange fees, how these rates apply, and enable them to discuss these rates with PSPs and networks as part of their negotiations for payment services. However, the information currently available to market participants does not appear to be sufficient to support efficient and competitive market outcomes:

• The information card networks publish on their interchange fee rates or amounts (whichever is applicable) is not always clearly broken down by types of transactions (e.g. card present/card not present) and is difficult to compare across networks.
• While the RBA publishes some aggregate information on scheme fees, it has been unable to publish data on the fees charged by individual card networks, because the networks have not consented to publication on the basis of commercial sensitivity (Connolly 2024).

The PSB considers that additional measures to address complexity and promote transparency appear necessary to improve competition and efficiency in the payments system. In weighing the options for regulatory intervention on the transparency of wholesale fees, the PSB has considered factors including the usefulness of the information for market participants, implementation costs, commercial sensitivity and the risk of price coordination from greater transparency.

Publishing aggregate information under Options 2 and 3 would allow PSPs and merchants to more directly compare average fees across networks, which in turn may increase competitive pressure on these fees. More directly comparable information about the cost of the services provided by different card networks would be beneficial for PSPs in negotiations with card networks and would increase scrutiny over fee increases. Greater transparency of wholesale fees would also help PSPs and merchants make decisions regarding LCR, further driving efficiency in the payments system.

The PSB sees value in including information on card-present and card-not-present transactions in this reporting, with transactions through mobile devices also separately identified (Options 2 and 3). Wholesale costs are higher for mobile wallet and card-not-present transactions than for physical card-present transactions, and additional transparency at the network level would help PSPs and merchants understand their payment costs and negotiate with the card networks. The burden on the card networks from publishing this information would be small, given the RBA’s existing reporting requirements closely mirror what is being proposed to be published under these options.

Less complex scheme fee schedules would help PSPs better understand the scheme fees they pay and implement LCR (Option 4). The RBA was particularly concerned by some acquirers reporting difficulty in determining the scheme fees paid by individual merchants. The RBA expects the fees charged to merchants to accurately reflect the card usage of their customers. Simplification of scheme fee schedules could reduce these challenges. PSPs would also be able to more easily identify and understand changes to scheme fees in a less complex schedule. Reducing the current complexity would also assist PSPs in their negotiations with card networks and make it easier for them to implement LCR for their merchant customers.

The PSB considers that scheme fee simplification should be driven by industry in the first instance. The PSB and RBA favour an industry-led solution for reducing the complexity of scheme fee schedules. However, the RBA stands ready to consider taking regulatory action if it judges that progress is insufficient or too slow. Progress could be measured by some, or all, of:

• a reduction in the number of active scheme fees and the average number of scheme fees applied per transaction
• the RBA requesting reports and evidence from card networks and PSPs on progress towards simplifying scheme fee schedules and improving the adequacy of information
• the RBA monitoring compliance with agreed measures.

The PSB is also conscious of the risk of upward price coordination in response to greater transparency. Upward price coordination could occur as an unintended consequence of transparency measures if a scheme that charges lower fees increases their fees to a similar level to competitors to increase their profits. Upward price coordination that is the result of cooperation, rather than independent business behaviour, will raise competition concerns. This could occur informally and would increase payment costs in the system. Additionally, price coordination may give rise to potential contraventions of the Competition and Consumer Act 2010, which is enforced by the ACCC .¹

However, the PSB considers the risk of upward price coordination as a result of the proposed disclosures to be low for wholesale fees. The PSB assesses that proposed disclosures are sufficiently aggregated that sensitive information – for example, on individual scheme fees – could not be derived for the purposes of anti-competitive practices. The lack of adverse outcomes in the credit card market from current transparency measures, alongside competitive pressures from LCR in the debit market, suggest that the risk of the proposed disclosures producing undesirable market outcomes is low. The RBA would continue to monitor competition between card networks in the debit and credit card markets, and stands ready to consider taking further regulatory action if evidence emerges of anti-competitive behaviour (see Chapter 5: Scheme Fees).

4.3 Preliminary assessment

The PSB’s preliminary assessment is that there is a strong case for the card networks to publish quarterly data on interchange and scheme fees with breakdowns across key transaction categories (Options 2 and 3). This would make merchants and PSPs better placed to: compare their wholesale fees across the market; negotiate deals with the networks; and determine how merchants could most effectively benefit from LCR. This would improve competition and efficiency in the payments sector, while minimising the risks of disclosing competitively sensitive information.

The PSB also assesses that it is necessary to address the complexity of scheme fees, given there is evidence that the current complexity hinders competitive dynamics and efficient outcomes. To this end, the PSB proposes to set a regulatory expectation for the card networks to improve the quality of their scheme fee information available to network members, with a focus on reducing complexity. The PSB considers that this approach would be preferable to formal regulatory intervention in the first instance. The PSB would closely monitor progress towards improving the transparency and reducing the complexity of scheme fees and would revisit the case for formal regulatory intervention if necessary.

Endnotes

In response to greater transparency, there may be a risk of parties engaging in anti-competitive conduct, including concerted practices that are prohibited by section 45 of the Competition and Consumer Act 2010. More information can be found in the ACCC’s 2018 updated Guidelines on Concerted Practices. 1