RBA Credit Card Surcharges: The Reserve Bank of Australia proposes to remove credit and debit card surcharges on July 15, 2025, as they released their review report on merchant card payment and surcharging. This move of the RBA could bring major changes to the payment system. Let’s see how it will affect you and the businesses.
RBA Credit Card Surcharges
Two days ago, the RBA published a consultation paper outlining a fresh plan for the elimination of surcharging on credit and debit cards. The authority says the surcharging is no longer fulfilling its purpose to encourage people to make the right payment choices, but it is not happening anymore.
Nowadays, people hardly use cash, businesses charge the same fees, and the government also can’t enforce rules regarding the hidden charges. So, to deal with the issue, the RBA proposes to remove surcharging from cards and help people save some money.
The bank has come up with the proposal after an eight-month-long review, meaning it is evaluated from every aspect. This will also make the payment through cards simpler, transparent, and ease the competition for card payment methods. Under this proposal, the surcharges on Visa, Mastercard, or EFTPOS may end by July 2026.
What do the credit card surcharges mean for you?
If you are a consumer, you can expect this proposal as a win for you because this will remove hidden charges from the card payment. You can understand this easily, see when you hail a taxi or pay for your coffee or meal at a restaurant through cards, they have a 1% to 2%additional fee for the payment method.
The restaurants or businesses sneakily put extra charges through card payment, saying the card charges; however, with the removal of surcharging, you will no longer have to pay the extra charges and save money. The bank estimates that removing the additional fees will result in annual savings for customers of about $1.2 billion.
Cash was more widely utilized when surcharging was first implemented decades ago to disclose the cost of payment methods. But now that we have moved to digital options, the surcharges are less useful. With its removal, it will also lower the interchange fees and induce more competition among banks.
How would it impact prices?
With the elimination of surcharges on the credit or debit card, many people are wondering about the increase in prices. Let’s understand it better, with no surcharges on cards, the businesses can add the charges of the payment method to the product, which would eventually increase the prices.
However, the RBA evaluated this concern and says it will only impact a 0.1% hike in prices. The RBA depicts the smaller price increase on the following reasons and addresses the concerns:
- The bank says not all businesses include surcharge costs as they already add them to their product prices.
- With the other proposal, like interchange fees, a lower cap could bring more transparency to the system, so businesses can deal with lower fees and shop around, which means no extra cost on the product.
- With this move, the competition will increase, and the consumers will have a choice to move to another place, so businesses will not be able to reduce prices, as it can impact their customer base.
What’s the reaction of businesses and payment services?
The Australian Restaurant and Cafe Association’s leader opposes the RBA proposal, saying the elimination of surcharges from credit cards or debit cards will lead the hospitality sector to bear more costs, which will eventually affect customers.
Small businesses may have opposed the surcharges ban as it can impact their revenue. Businesses have mixed views about the proposal, where some are happy with the reduced international fee and some are worried about the prices.
Talking about the payment service providers, they are supportive of the transparency in the payment system. Stripe, Square, and other banks say it would be affordable and easy to remove surcharges on both card types and call it a balancing step for the payment system.
However, it will cost the providers to remove the surcharges, so it might not be a winning situation for them.
Under the RBA proposals, the service providers will be obliged to report the information about the fees they charge to businesses and help the businesses to find cheaper options.
What happens next?
The RBA suggests lowering interchange costs, eliminating card surcharges, or asking card networks to disclose their rates in order to make the system more efficient and transparent. The RBA is now asking for comments on the suggested changes by August 26, 2025.
If you wish to submit your feedback on the proposed policy, you can submit a written submission to pysubmissions@rba.gov.au or mail it to the following address:
- Head of Payments Policy Department
- Reserve Bank of Australia
- GPO Box 8947
- Sydney NSW 2001
The RBS plans to use the feedback to finalize the reforms and expects to publish its conclusion on the policies by the end of 2025. If the feedback comes in favor, the bank plans to make amendments to surcharging rules and interchange fees by July 01, 2026.
RBA has made the proposal based on their eight-month review, so if you wish to submit your view, you can read the consultation paper available here and share your opinion by August 26, 2025.
