Review of Merchant Card Payment Costs and Surcharging – Phase 3 1. Introduction
Conclusions Paper
March 2026
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1.1 Background
The RBA has regulatory powers in respect of payment systems and their participants under the PSRA. Under the Reserve Bank Act 1959, the RBA’s payments system policy is set by the PSB with a mandate to control risk in the financial system, promote the efficiency of the payments system and promote competition in the supply of payment services consistent with the overall stability of the financial system. The RBA has used these powers since the early 2000s to introduce standards and access regimes relating to card payments and has periodically reviewed its regulations to ensure they remain fit for purpose. The previous review of retail payments regulation was undertaken by the RBA in 2019–2021.
The RBA had originally intended to undertake a holistic review of the payments system under an expanded remit with amendments to the PSRA. However, delays in the passage of these amendments, combined with the heightened concerns around merchant card payment costs and surcharging, meant the PSB decided to commence a targeted review sooner, focusing on issues within the RBA’s powers at the time. In October 2024, the RBA launched the Review of Merchant Card Payment Costs and Surcharging (the Review). This Conclusions Paper sets out the final decisions of the PSB. It includes a copy of the RBA’s Standards incorporating the variations that the RBA intends to determine and lodge for registration on the Federal Register of Legislation and that are to take effect in accordance with the implementation timeline set out in this paper.
1.2 Review process and PSRA reforms
The RBA published an Issues Paper in October 2024,5 which sought stakeholder views on whether the RBA could take further regulatory actions to promote competition and efficiency by putting downward pressure on merchant card payment costs, and whether the surcharging framework remains fit for purpose. Consistent with previous regulatory reviews conducted by the RBA, the consultation period ran for six weeks, with extensions granted to some stakeholders upon request. The RBA received 94 written submissions to the Issues Paper from organisations and individuals and conducted around 40 consultation meetings.6 From February 2025, to inform any proposed changes to interchange regulations, the RBA undertook the first iteration of the Issuer Cost Study in consultation with issuers.
The RBA published a Consultation Paper in July 2025, presenting the preliminary conclusions of the PSB and draft variations of the RBA’s Standards for stakeholder feedback. The PSB’s preliminary view was that competition and efficiency in the payments system would be enhanced by:
- removing surcharging on all designated debit, prepaid and credit card networks7
- lowering wholesale card payment costs, particularly for small merchants, by lowering caps on interchange fees on domestic-issued card transactions acquired in Australia and introducing a cap on interchange fees for foreign-issued card transactions acquired in Australia
- increasing the transparency of card payment costs to help PSPs and merchants compare fees across providers and shop around for better-value payment deals.
Stakeholders were invited to provide submissions on the policy proposals outlined in the Consultation Paper by late August 2025. The RBA received numerous queries on surcharging statistics and the Issuer Cost Study referred to in the Consultation Paper. In the interests of transparency and open access to information, the RBA decided to publish additional material including statistics on surcharging8 and further information on the Issuer Cost Study9 in August 2025 to assist stakeholders with preparing their submissions on the Consultation Paper.
The consultation period ran for a total of six weeks, with extensions provided of up to two weeks, consistent with previous regulatory consultations run by the RBA. The RBA received over 170 written submissions,10 conducted over 100 stakeholder meetings and wrote to numerous stakeholders seeking further evidence and feedback in the months following the publication of the Consultation Paper. The RBA published a summary of submissions in October 2025.11 Given the volume of evidence and feedback from stakeholders, reflecting divergent and sometimes opposing views, the PSB decided to extend the time for the Review until March 2026 to enable further detailed assessment of the policy options.
The RBA continued to gather further evidence from stakeholders in the second half of 2025. The RBA conducted a second iteration of the Issuer Cost Study to increase the scope of the data collected. These data were provided to the RBA by early 2026. The RBA also sought further written feedback from merchants, merchant groups, acquirers and PSPs in late 2025 on issues relating to scheme fees, commercial cards, transparency of merchant fees and the pass-through of interchange reductions. Throughout the Review, the RBA has also sought information from various stakeholders in the payments industry on the time and resources required to implement the policy options.
Amendments to the PSRA were passed by Parliament in September 2025 and took effect in December 2025. This expanded the RBA’s regulatory remit by broadening the definitions of ‘payment system’ and ‘participant’. Some stakeholders asked the RBA to undertake a longer term, holistic assessment of the payments system before making decisions about policy issues in this Review. The PSB decided that it was not in the public interest to further delay the conclusions to this Review given the importance of the reforms being considered. However, in concluding this Review, the PSB considered the potential interplay between policy proposals in this Review and regulatory issues that may be considered under the amended PSRA.
This Review has benefited from strong engagement with a range of stakeholders with diverse views on these issues. The PSB has given careful consideration to these views in assessing which regulatory actions would best support the public interest in line with the PSB’s responsibility to control risk in the financial system and promote the efficiency and competitiveness of the payments system.