The Reserve Bank of Australia (RBA) has proposed eliminating surcharges on debit and credit card payments, a move it says could save customers an estimated A$1.2 billion annually. Under the proposal, surcharges on Eftpos, Mastercard, and Visa payments would be banned from July 2026, while fees for businesses using card payment systems could also be reduced.
RBA Governor Michele Bullock stated that the declining use of cash has made it harder for Australians to avoid surcharges. 'We think the time has come to address some of these high costs and inefficiencies in the system,' she said. The proposal goes further than the previous government's plan to ban surcharges only on debit cards.
However, the Australian Restaurant and Cafe Association's chief executive, Wes Lambert, criticised the proposal, warning it would drive up menu prices. 'Who the hell does the RBA think will bear the cost of this ridiculous decision? First, merchants, and then customers,' he said.
The RBA consultation paper noted that payment service providers such as Square, Stripe, and major banks indicated it would be faster and less expensive to remove surcharges on both card types rather than just debit. Square's Australian executive director, Marco Lamantia, welcomed the across-the-board elimination, describing it as the 'most practical and balanced outcome'.
Under the reforms, payment providers would be required to report fees charged to businesses, improving transparency. The RBA also proposes lowering the cap on interchange fees, with small merchants processing less than A$10 million in card transactions annually expected to save about A$185 million per year. Larger businesses and the payments industry would collectively be more than A$1 billion worse off annually.
