The Reserve Bank of Australia (RBA) has confirmed it will remove surcharging on debit, prepaid and credit cards, following the conclusion of its Review of Merchant Card Payment Costs and Surcharging.

The Payments System Board (PSB) said the move, along with reductions in interchange fees and improved transparency, is in the public interest and will support competition and efficiency in the payments system.

Surcharging, introduced over 20 years ago to encourage consumers to choose lower-cost payment methods, is no longer achieving its intended effect.

The PSB noted that many businesses surcharge all cards at the same rate, enforcement of the existing framework has become difficult, and cash use has declined.

Removing surcharges will simplify card payments, make them more transparent, and align payment costs with consumer preference to include them in advertised prices.

The PSB also decided to lower the caps on interchange fees, which merchants pay when customers use cards.

Small businesses, which currently pay fees close to the caps, will gain the most from these changes.

Additionally, the RBA plans to improve transparency over fees charged by card networks and payment service providers to support competition and make it easier for businesses to compare costs.

Most reforms, including the removal of surcharging and domestic interchange fee reductions, will take effect on 1 October 2026.

The RBA will introduce interchange caps on foreign cards and certain transparency measures from 1 April 2027, giving the payments industry time to implement the changes.

It plans to begin a public consultation in mid-2026 to assess whether further regulation is needed in areas such as mobile wallets, ‘buy-now, pay-later’ services, e-commerce platforms and three-party card networks.

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