Australia Kills $1.8bn of Card Surcharges From 1 October

On Thursday, card surcharges disappear from Australian checkouts. Six networks have agreed to ban them, three because the Reserve Bank stopped protecting the right to charge and three by choice.

The RBA estimates Australians were paying $1.6 billion of the $1.8 billion in card surcharges levied each year on the regulated networks. From 1 October, that line comes off the bill.

What actually changes

The RBA does not regulate merchants. What it did was remove its own prohibition on "no-surcharge" rules, which had stopped card networks from banning surcharges. With the prohibition gone, the networks moved.

eftpos, Mastercard and Visa, the three networks the RBA designates, have each said they will bar surcharging on credit, debit and prepaid cards from 1 October. American Express, PayPal and UnionPay, none of which the RBA currently regulates, have said they will do the same.

For most merchants the change will be physical. The RBA says large payment service providers intend to remove the surcharging function from their terminals around 1 October.

What is not covered

Surcharges that exist for other reasons survive. The RBA's guidance is explicit that the change does not touch weekend surcharges, public holiday surcharges, booking fees or service fees.

Nor does it touch what providers charge merchants. Terminal rental, transaction processing and other acquiring fees are payments for services, not surcharges, and they continue.

Taxi fares stay with state and territory regulators. And a merchant that issued an invoice before 1 October cannot surcharge a card payment made after it.

Merchants can still steer customers, but only with a carrot: discounts for particular payment methods remain allowed.

The part merchants should read twice

Removing the surcharge does not remove the cost. It moves it onto the merchant, who can put it into shelf prices but cannot itemise it.

The RBA's answer is to cut the wholesale cost at the same time. From 1 October, interchange caps on domestic transactions fall: the cap on consumer credit drops to 0.3% of transaction value from 0.8%, and the debit and prepaid cap drops to 8 cents, or 0.16% on an ad valorem basis, from 10 cents or 0.2%. The commercial credit cap stays at 0.8%.

Foreign-issued cards, until now outside the regime, get a cap of 1.0% from 1 April 2027.

The RBA puts the total saving at about $910 million a year in lower wholesale costs, against $1.8 billion of surcharges removed. The two numbers do not match, and the gap is the merchant's to manage.

Whether the saving arrives is a separate question

The reform assumes acquirers pass the interchange cuts through. The RBA is not relying on trust.

From 30 October, the designated networks and large acquirers must publish specified card fee information on their websites, and the RBA will republish it. From 30 January 2027, large acquirers must publish how much of the interchange reduction reached merchant service fees. From 1 April 2027, all acquirers must give merchants more detailed statements.

That sequence is the useful part of this reform for anyone outside Australia: a regulator cutting a wholesale price and then publishing, firm by firm, who passed it on.

What this is not

HaiPay has not verified that every network has implemented what it announced, and the RBA's own page notes that network rules may change.

The $1.6 billion and $1.8 billion figures are RBA estimates of surcharges paid, not measured totals, and the $910 million is the RBA's estimate of the interchange effect. Whether consumers end up better off depends on how much of the surcharge is rebuilt into prices, which nobody can measure yet.

Exemptions are for the networks to grant, not the RBA, so pockets of surcharging may survive on terms HaiPay cannot see today. HaiPay did not contact the RBA, any network or any acquirer.

What to watch

The October and January publications. They will show, by name, which acquirers passed the interchange cut through and which did not.

Shelf prices in categories that surcharged heavily, such as hospitality and taxis, where the cost has to go somewhere.

And the further review the RBA said it would run on the parts of the payments system it does not regulate, which is where buy-now-pay-later and the non-designated networks sit, including whether American Express should be brought in.