Card Surcharges Are Being Scrapped In Australia — Here’s What Changes And When

The Reserve Bank of Australia has today confirmed it will ban card payment surcharges on debit, prepaid, and credit card transactions across the EFTPOS, Mastercard, and Visa networks. The change — one of the most significant reforms to Australia’s payments system in years — takes effect on October 1st, 2026. For anyone who’s stared at a 1.5% surcharge on a $6.00 coffee, or quietly absorbed a $4.00 fee on a domestic flight booked online, the news lands as a straightforward win.

The decision came via the RBA’s Payments System Board, which today published its Conclusions Paper following an extensive review that began with a public consultation in July 2025. The board received 174 submissions from banks, payment processors, small businesses, and consumer groups — and landed on a three-part reform package it says is in the public interest.

Why the surcharge system is being axed

The surcharging framework was introduced more than two decades ago. At the time, the premise was that card payments cost merchants more to process than cash, so a surcharge gave consumers a reason to reach for their cash instead of their card. It was a price signal designed to drive behaviour.

That logic doesn’t hold anymore. Cash now accounts for just 13% of in-person transactions, and the shift to contactless payments — accelerated by the pandemic — has made cards the default for most Australians. When there’s no practical alternative, a surcharge ceases to function as a price signal and becomes a penalty for paying the way almost everyone pays.

Consumers and businesses find the rules complex and confusing, surcharges are often not well disclosed, and most consumers want surcharging to stop. The RBA’s own research found that only 13% of consumers are always told about surcharges at the point of sale — meaning most people discover the fee after they’ve already decided to buy.

What’s actually changing

The surcharge ban is the most visible part of today’s announcement, but the full reform package has three distinct components.

First, the ban itself. From October 1st, 2026, businesses on the EFTPOS, Mastercard, and Visa networks will no longer be permitted to charge customers a surcharge for paying by card — debit, prepaid, or credit.

Second, interchange fees are being cut. These changes are expected to lower businesses’ costs when they accept domestic or overseas card payments, with small businesses expected to benefit the most because they tend to pay fees closer to the existing caps. This is the mechanism designed to stop merchants simply rolling their card processing costs into base prices — by reducing what businesses actually pay, the theory goes that prices won’t need to rise significantly to compensate.

Third, payment networks and large acquirers will be required to publish the fees they charge, giving businesses the information they need to compare providers and negotiate better rates. Currently, the opacity of these fees makes it difficult for merchants, particularly small ones, to know whether they’re paying a fair price.

The introduction of a cap on interchange fees for foreign cards and some changes to payment cost transparency will come into effect on April 1st, 2027, to ensure the payments industry has sufficient time to implement these more complex changes.

What does it mean for Perth businesses and shoppers

For anyone eating out, booking tickets, or shopping at local retailers, the most immediate difference is that from October next year, the line on the EFTPOS screen that used to say “surcharge: $0.38” will be gone. It’s estimated that consumers could collectively save around $1.2 billion annually — roughly $60.00 per year per card-using adult.

For small businesses, the picture is slightly more nuanced. Many Perth hospitality venues, markets, and independent retailers currently absorb card fees rather than passing them on — and those businesses should see some reduction in their processing costs under the new interchange caps. Businesses that currently surcharge will need to restructure their pricing before the October deadline, folding any card costs into their base prices.

One possible side effect worth watching out for is that when interchange revenue falls, the profit available to support reward points earn rates, sign-up bonuses, and premium benefits is also reduced. Frequent flyer credit card holders in particular may find their points schemes quietly reduced in the second half of 2026 as banks reprice their card products.

What’s not covered… yet

The RBA was clear that today’s reforms don’t reach everything. The bank plans to start a public consultation in mid-2026 to assess the public-interest case for regulating areas of the retail payments system not covered by this review, including mobile wallets, three-party card networks (like American Express), buy-now, pay-later services, and e-commerce platforms.

That puts Afterpay, Apple Pay, Google Pay, and Zip squarely in scope for the next round. BNPL providers currently charge merchants between 3% and 6% per transaction — well above standard card rates — and are contractually prohibited from allowing merchants to pass those fees on to consumers. Whether that arrangement survives the next consultation is now an open question.