Bank
Australia Bans Card Surcharges, Saving $2.5B Annually
The Reserve Bank of Australia has decided to ban card surcharges for Eftpos, Mastercard and Visa payments from 1 October 2026. The move will take $1.6 billion a year from Australians and free up further savings of $900 million for small businesses through lower interchange fees, the combined annual savings being $2.5 billion in total. The RBA discovered that surcharging is no longer functional, three quarters of Australians want it scrapped. American Express is exempt from the ban. The RBA will also hold consultations in mid-2026 about expanding reforms to include mobile wallets and buy-now-pay-later services.
As of October 1, the Reserve Bank of Australia has banned surcharges on debit and credit cards. It’s the largest change to how Australians pay for things in two decades, and it returns $2.5 billion a year into the hands of consumers and businesses.
Key Highlights
- Card surcharges on Eftpos, Mastercard and Visa payments will be abolished from October 1, 2026, saving Australian consumers $1.6 billion a year.
- For its part, the RBA will also lower interchange fees that are paid by businesses saving small businesses some $900 million per annum, bringing total annual savings to $2.5 billion.
- The RBA discovered that surcharging no longer has the desired effect.
- Foreign card fees will be capped from April 1, 2027, overseas card surcharges will continue to apply until then
- In mid-2026, the RBA will consult on whether to extend these reforms to encompass mobile wallets and buy now-pay later services.
RBA is Removing Card Surcharges
On March 31, after a year of review, the Reserve Bank of Australia said it would ban surcharges on all debit and credit card payments as of Oct. 1, 2026. The ban applies to Eftpos, Mastercard and Visa networks, the three major card systems used daily by Australians. The RBA said that the system of surcharging, introduced more than two decades ago, no longer operated as intended.
Surcharges were originally intended to incentivise people away from expensive payment types like credit cards. But Australians mostly no longer use cash, cards are now the norm, and most businesses charge the same surcharge rate no matter which card it is. Consumers cannot easily avoid surcharges, the rules are confusing and a survey by the Australian Competition and Consumer Commission (ACCC) of 3,000 Australians said surcharging was unnecessary and should stop, according to the RBA.
$2.5 Billion a Year in Savings, Who Gets the Cash
Scrapping surcharges will save consumers in Australia $1.6 billion a year. On top of that, the RBA is slashing the interchange fees, the behind-the-scenes charges businesses pay to banks when customers use Visa and Mastercard, which will save up to $900 million a year for small businesses. Combined, that’s $2.5 billion in annual savings churning back through the economy.
What’s Different for Businesses
From October 1, businesses that currently charge surcharges will no longer be able to add them on. That doesn’t mean the price of accepting cards disappears for merchants, it just means they can’t charge it as a line item at checkout. Many retailers will probably just offer the card processing fee as baked into their advertised prices instead, meaning the price you see will be the price you pay, with no extra surprise charge at the end.
The RBA is also mandating that payment providers publish their merchant fees so businesses can more easily compare costs, and switch providers if they are being ripped off. More complicated changes, including limits on fees for foreign card payments, will take effect April 1, 2027, allowing the payments industry more time to adapt.
What Is Still Not Covered, And What’s Next
The October ban applies to Eftpos, Mastercard and Visa in-store and online payments. American Express is exempt, surcharges on Amex cards will still be permitted. Businesses can also continue to charge fees for direct debit payments that rely on bank account details instead of card networks.
The RBA also reaffirmed it will begin a separate public consultation in mid-2026 to assess aspects of the payments system not addressed by this review, including mobile wallets like Apple Pay and Google Pay, buy now pay later services and e-commerce platforms. Those could all be further regulated, depending on what the consultation discovers.
FAQs
- In Australia, when do card surcharges stop?
October 1, 2026, for all payments made by Eftpos, Mastercard and Visa in-store or online.
- Are prices going to rise as a way to compensate for the expense?
Maybe, some companies will incorporate card fees into their stated prices instead of tacking them on separately.
- Does the ban include American Express?
No, Amex surcharges won’t end after October.
4. What about buying now, paying later, and using Apple Pay?
Not yet, the Reserve Bank intends to consult on those in mid-2026 and regulation may follow.
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