The Reserve Bank of Australia has unveiled sweeping changes to the card payments system, confirming card surcharges will be scrapped and interchange fees reduced in a move it says will make payments simpler, fairer and more competitive.
In a Conclusions Paper released today, the RBA said its Payments System Board had finalised a package of reforms following a months-long review of merchant card payment costs and surcharging, including public consultation that began in July 2025.
The biggest change for consumers will be the removal of surcharges on debit, prepaid and credit cards across the designated eftpos, Mastercard and Visa networks from 1 October 2026.
The central bank said the surcharge system, introduced more than 20 years ago, was no longer working as intended. Instead of steering consumers towards cheaper payment methods, many businesses now apply the same surcharge across all card types, while the declining use of cash has further reduced the policy’s effectiveness.
The RBA said folding payment costs into advertised prices would make transactions more transparent for consumers and align with the way most Australians now prefer to pay.
The reform package also includes lower caps on interchange fees, the charges paid by businesses when they accept card payments. The RBA said the change should reduce costs for merchants accepting both domestic and overseas card payments, with small businesses expected to benefit the most because they often pay fees closer to the current cap.
In another major shift, the central bank will require greater transparency from card networks and payment service providers over the fees they charge. The aim is to make it easier for businesses to compare providers and negotiate better deals, while also increasing competition across the payments system.
Most of the changes will begin on 1 October 2026, including the end of surcharging and lower interchange caps for domestic card transactions. More complex measures, including a new interchange cap on foreign cards and additional transparency reforms, will take effect on 1 April 2027 to give the industry more time to prepare.
The RBA has also flagged further scrutiny of other parts of the fast-changing payments market. It plans to launch a fresh public consultation in mid-2026 on whether there is a public interest case for regulating sectors not covered by the current review, including mobile wallets, three-party card networks, buy now, pay later services and e-commerce platforms.
The overhaul marks one of the most significant resets of Australia’s retail payments system in years, with the RBA signalling it wants a market that is easier for consumers to navigate and less costly for businesses to use.
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