Australian consumers will no longer be subject to commission fees on card payments, the country’s central bank having decided to ban this very unpopular practice, considered inefficient and opaque.
Closing a months-long public consultation process, the Reserve Bank of Australia (RBA) announced on Tuesday that it would remove surcharges on designated eftpos, Mastercard and Visa networks from October 1.
The RBA estimates the change will save consumers A$1.6 billion a year, although some banks and businesses have warned they will have to make up the shortfall in other ways.
“The increased prevalence of businesses applying the same surcharge on all cards, difficulties in enforcing the current framework and reduced use of cash by consumers have reduced the effectiveness of the surcharge regime,” the RBA said in a statement.
The RBA also intends to cap interchange fees on credit cards charged by banks at 0.3% of the transaction value, up from 0.8% currently. The measure is expected to reduce costs for businesses by around A$900 million a year, although it could also weigh on banking revenues.
American Express benefits from a separate agreement with the RBA, but will be subject to a new review beginning in mid-2026. This review will focus on the regulation of mobile wallets, third-party card networks, “buy-now, pay later” split payment services and e-commerce platforms.
According to an RBA survey of 3,000 Australian consumers, around three quarters of them consider these commissions unnecessary and want them removed.
However, the Australian Banking Association (ABA) has argued consumers could now face higher card fees, increased interest rates and shorter interest-free periods.
“International experience shows that this reduction in interchange will not lower costs for businesses; it will only shift more of the fees they pay into the pockets of multinational payments and technology companies,” Simon Birmingham, CEO of the ABA, said in a statement.
Responding to the announcement, the Australian Restaurant & Cafe Association said the changes would force establishments to increase their menu prices to cover transaction fees.
