AUSTRALIA: CARD PAYMENTS COSTS AND SURCHARGING REFORMS – WHAT IT MEANS FOR THE PAYMENTS INDUSTRY

By: Daniel Knight, Simon Kiburg and Joshua Dries

On 31 March 2026, the Reserve Bank of Australia (RBA) published its conclusions paper titled Merchant Card Payments Costs and Surcharging.

Key Takeaways

The RBA outlined a range of changes including three key reforms to card payment surcharging and costs, specifically:

• Allowing card schemes to prevent surcharging on debit and credit cards, citing the absence of meaningful alternatives for many consumers;
• Lowered the caps on interchange fees (including introducing caps for foreign cards for the first time) to reduce acceptance costs for merchants, particularly for small businesses; and
• Card schemes and large acquirers will be required to publish fees and provide standardised, clearer information to businesses to promote greater transparency.

Surcharging

On 1 October 2026, the RBA will lift its prohibition on ‘no-surcharge rules’ for debit, prepaid and credit cards issued by Visa and Mastercard. The RBA expects that the card networks will impose no-surcharge rules shortly after this occurs.

Interchange Fees

Debit and prepaid card interchange fees will be capped at 8 cents, consumer credit card interchange will be capped at 0.3%, and foreign‑issued cards will face a new 1.0% cap. The existing interchange cap for commercial credit cards (0.8%) will be retained, partially owing to the potentially adverse effect on competition. The RBA accepted that small issuers face higher costs but determined that any specific exemptions would lead to heightened regulatory complexity and arbitrage risks whilst also increasing end‑user costs for merchants and consumers.

Increased Transparency

The Payment Services Board expects the card networks to take steps to simplify their scheme fee schedules and improve their fee billing practices as a result of these changes.

Next Steps

These changes will take effect from 1 October 2026.