Review of Merchant Card Payment Costs and Surcharging – Phase 3 At a Glance: What the Key Conclusions Are and What They Mean for Businesses and Consumers

In October 2024, the RBA began a Review of the card payments system and how it serves Australian consumers and businesses. The Review examined merchant card payment costs and surcharging rules.

The RBA received over 260 written submissions and held around 150 meetings with members of the payments industry, government agencies and business or consumer groups. The RBA also collected and analysed a large volume of payments data.

The Review’s conclusions

Following the Review, the RBA has made three key decisions which together will make card payments simpler for consumers and businesses and help lower the total cost of payments.

  1. The RBA concluded that card surcharging on both debit and credit cards should end on 1 October 2026. This will apply to eftpos, Mastercard and Visa cards. We reached this decision because surcharging no longer works as intended. It has become harder for people to avoid surcharges. Consumers and businesses find surcharging rules complex and confusing, and surcharges are often not well disclosed. Most Australians want surcharging to stop.

  2. The RBA is helping businesses to reduce their payment costs when surcharging is removed.

    We are lowering the maximum interchange fee that businesses can be required to pay for consumer credit card and debit card payments. We are introducing a cap on interchange fees for foreign card payments. We are also taking steps to help ensure payments service providers pass on these savings to businesses.

  3. The RBA will increase transparency of card payment fees.

    We will require large acquirers as well as eftpos, Mastercard and Visa to publish the fees they charge, which will help businesses check how their fees compare. Businesses will get standardised information on their statements, which can help them to get accurate quotes from different providers.

What these changes mean for businesses

The reductions in interchange fees should help to lower card payment costs for businesses, especially small businesses that are usually charged the highest costs to accept payments. Businesses will no longer have to understand and follow the complex surcharging rules.

Of the 16 per cent of Australian businesses that surcharge, it will be up to them to choose whether to include payment costs in their sticker prices when surcharging ends, just as they do with all their other costs. If so, the sticker prices charged by these businesses would increase a little, though most consumers would pay similar amounts as they are paying now (just in a different form, via the sticker price rather than the surcharge). Businesses will continue to be able to offer discounts if they choose, including to consumers that pay by cash.

The RBA’s new transparency measures will make it easier for businesses to check that they are not paying more than they need and to shop around for better deals.

What these changes mean for consumers

When card surcharging ends, the sticker price will be the price that consumers end up paying. Consumers will no longer be surprised at the checkout by an unexpected surcharge for paying by card.

Consumers who shop at businesses that currently surcharge will pay similar amounts as they are paying now (just in a different form, via the sticker price rather than the surcharge).