🏦 RBA Proposes Ban on Card Surcharges, Aiming to Save Aussies $1.2bn a Year

The Reserve Bank of Australia (RBA) has initiated a wide-reaching consultation on banning surcharge fees for multiple card transactions—including eftpos, Mastercard, and Visa—potentially saving consumers an estimated A$1.2 billion annually 

Why It Matters

• Consumer Savings: Australians currently incur roughly A$1.2 billion in surcharge fees every year during everyday card payments .

• Modernising Payments: With cash usage falling to around 13% of transactions (down from 70% in 2007), the RBA argues that surcharge rules, set decades ago, no longer reflect today's digital economy.

What’s on the Table

1. Ban on Surcharges: Eliminate additional fees at points of sale for eftpos, MasterCard, and Visa transactions—across both debit and credit cards—by July next year, pending consultation outcomes.

2. Lower Interchange Fees: Cap interchange fees that retailers pay when they accept card payments—a change expected to save both big and small businesses another A$1.2 billion annually.

3. Transparency Boost: Require card networks and large payment providers to publicly disclose their fee schedules, encouraging transparent and competitive processing costs.

Stakeholder Reactions

• Businesses’ Concerns:

  
  

  • The Independent Payment Forum warns that small businesses currently bearing A$6.4 billion per year in processing fees could end up absorbing costs if surcharges are eliminated, potentially increasing prices by about 0.1% .

  • Council of Small Business Organisations Australia echoed this, cautioning that forbidding surcharges might just hide the fees, leading to higher overall costs for consumers.

    
    

• Support from Industry Voices:

  • Payment networks like Square and the Australian Banking Association support the move, citing fairness and transparency.

  • Major card brands and fintech players also signal cautious optimism, though Visa warns that exemptions for providers like American Express, Google, Apple Pay, and BNPL may skew competition—with greater transaction flow toward those exempted.

Wider Impacts & Next Steps

• The RBA is seeking feedback through the consultation, expected to close by August 26, 2025, with final decisions projected by year-end 

• Federal Treasurer Jim Chalmers supports the initiative but acknowledges it could impact small business margins and inflation slightly—though he notes the central bank has the authority to implement such changes independently 

📌 In Summary

• What’s at stake: Consumers stand to gain A$1.2 billion annually from surcharge bans; businesses benefit from cut interchange fees.

• Potential pitfalls: Small merchants may end up shouldering processing costs unless broader reforms are enacted.

• Timeline: Public consultation underway until August 26; implementation anticipated by July 2026, pending finalisation.

This move is part of a larger push by the RBA to modernise Australia’s payment ecosystem—boosting competition, reducing hidden fees, and aligning with global best practices.