Australia implements card surcharge ban and interchange fee reforms

New regulations from the Reserve Bank of Australia (RBA) regarding merchant card payment costs and surcharging took effect on October 1. The reforms include a de facto ban on card surcharges and a reduction in the maximum consumer credit card interchange fees from 0.8% to 0.3%.

These changes are expected to save Australian businesses approximately $910 million annually in payment costs, though card issuers face a potential $660 million hit to interchange revenue. In response, Australia’s ‘Big Four’ banks—Westpac, Commonwealth Bank, National Australia Bank, and ANZ—are revamping their credit card offerings by raising interest rates and fees while reducing or removing rewards, points, fee waivers, and travel insurance benefits.

Marketing experts suggest the surcharge ban may influence consumer behavior, potentially driving a return to cash as shoppers seek more visibility over their spending. The removal of itemized fees may lead to more deliberate and intentional spending habits, particularly as retailers absorb processing costs by adjusting base prices.