The Reserve Bank of Australia (RBA) has proposed sweeping changes to the nation’s payments system that could eliminate debit and credit card surcharges and reduce costs for small businesses. If implemented, these changes would save both consumers and merchants an estimated $1.2 billion annually.
In its review, the RBA concluded that current surcharge rules — designed to guide consumers toward lower-cost payment methods — are no longer effective, especially as cash transactions continue to decline. The proposed reform would permit eftpos, Visa, and Mastercard to ban surcharges, a move currently restricted by the central bank.
“Our aim is to build a more efficient, transparent, and competitive payments environment,” said RBA Governor Michele Bullock. She emphasised that the proposed changes would be enacted under existing RBA authority, meaning no legislative approval is needed.
Balancing Merchant Concerns with Business Relief
While some small businesses have expressed concern that removing surcharges could force them to absorb card fees, the RBA aims to counter this by reducing the cap on interchange fees — the charges banks and payment providers impose on merchants. These reductions would primarily benefit small enterprises, which typically lack the bargaining power of larger firms.
According to the RBA, approximately 90 per cent of businesses would pay lower fees under the new structure. Foreign card interchange fees would also be capped, offering relief to merchants who accept international payments.
