Reserve Bank of Australia calls for end to debit, credit card surcharges costing Aussie shoppers $1.2 billion annually

Sky News AU

15-07-2025

The Reserve Bank of Australia has called for surcharges on eftpos, Mastercard and Visa cards to be scrapped in a move that could save shoppers $1.2 billion each year.
The central bank on Tuesday revealed a three-tiered approach to tackling niggly debit and credit card surcharges that ping consumers.
Alongside demanding an end to surcharging, the RBA also called for the cap on interchange fees, which are paid by businesses to shoppers' banks, and demanded greater transparency around these fees.
The latter, the RBA said, will make it easier for businesses to shop around for better-value payment deals.
Removing interchange fees could save businesses $1.2b annually and about 90 per cent of local businesses are estimated to be better off under the central bank's proposal, according to the RBA.
It would 'benefit small businesses the most' as they generally pay higher interchange fees.
The RBA's call, however, was met with backlash from the Australian Restaurant & Cafe Association (ARCA) which labelled it a 'short-sighted, anti-small business policy' and argued it would force establishments to pass costs onto consumers.
'Who the hell does the RBA think will bear the cost of this ridiculous decision?' ARCA chief executive Wes Lambert said.
'First, merchants — and then customers, through higher menu prices in the middle of a cost of living crisis.
'No matter how low merchant fees go based on the RBA's intention to save businesses $1.2 billion dollars, with no surcharging, businesses who previously paid net $0 in merchant fees, will now be faced with the bill.'
Similarly, the Council of Small Business Organisations Australia said the proposal was a 'mixed bag' as it welcomed reforms to transparency and fee reductions but warned there were 'serious unintended consequences by eliminating the right to surcharge'.
'Removing surcharges doesn't remove all the cost, it simply hides it,' COSBOA chair Matthew Addison said.
'For small businesses already managing tight margins, this means those costs would have to be absorbed into base prices, making it harder for businesses to be transparent and for consumers to make informed choices.'
Australian Payments Plus, which covers BPAY and eftpos in Australia, said it welcomed the RBA's submission and stressed a surcharge bank will 'simplify the payment experience for customers and bring consistency across the industry'.
'It also means merchants will need to absorb these costs, making efficient payment routing and competitive and transparent pricing more important than ever,' Australian Payments Plus chief payments and schemes officer Adrian Lovney said.
The RBA will continue to seek feedback on the changes until late August before handing down a final proposal at the end of the year.
Changes will be introduced from the beginning of next year and enforced from July 1.
Major Australian banks and the Australian Banking Association have called for interchange fees not to be lowered as they help counteract fraud and cover chargeback rights – which allows banks to reverse certain payments.
It comes as Treasurer Jim Chalmers last year vowed to ban debit card surcharges to ease cost of living pressures, but does not extend to credit card purchases.
'This is all about getting a better deal for consumers, reducing costs for small businesses and promoting a more competitive payments system,' Mr Chalmers said in October.