The Reserve Bank has recommended the removal of card payment surcharges for both debit and credit transactions, which would save customers approximately $1.2 billion annually. Starting from July 2026, surcharges on Eftpos, Mastercard, and Visa card payments will be prohibited, while new fees for businesses utilizing card payment systems could be reduced based on a recent RBA proposal.
Governor Michele Bullock of the RBA stated that the diminishing use of cash has made it more challenging for Australians to avoid surcharges. The new rule would make a more significant impact than the Albanese government’s pre-election cost-of-living proposals, which sought to ban only debit card surcharges and investigate excessive card fees.
According to the RBA, removing surcharges for all types of cards would be quicker and more cost-effective than applying this change only to debit cards.
Provider support
Payment service providers such as Square, Stripe, and major banks have endorsed the proposal to eliminate surcharges on all card types. Square’s Australia executive director, Marco Lamantia, considered this to be the “most practical and balanced outcome,” which would benefit both small businesses and consumers by promoting competition and choice in card processing services.
Businesses’ potential drawbacks
Small businesses, however, expressed concerns about this ban, worrying it would force them to make up for the lost revenue by increasing the prices of goods and services.
RBA proposal details
Under the RBA proposal, reforms would be finalized by December 2025, and payment services would be prohibited from surcharging credit and debit card transactions beginning in July 2026. The proposal also includes lowering the cap on interchange fees – charges levied by providers when businesses accept card payments. These measures will help increase transparency as businesses can search for card processing deals with lower fees.
The effects of the proposal
Most businesses would benefit financially from this reform package, with the RBA estimating that small merchants who process less than $10 million in card transactions each year would save $185 million annually. However, larger businesses, and the payment industry as a whole, may lose more than $1 billion annually. To ensure that businesses are transparent about the fees they charge, providers will be required to disclose their charges.
Source: https://www.theguardian.com/australia-news/2025/jul/15/card-payment-surcharges-should-be-banned-for-debit-and-credit-payments-rba-says
