Australia bans credit and debit card surcharges

New regulations in Australia, effective October 1, 2026, prohibit businesses from applying surcharges to transactions made via eftpos, Visa, Mastercard, and American Express. The Reserve Bank of Australia (RBA) introduced these reforms to increase price transparency and simplify the checkout process, estimating the move could save consumers approximately $1.6 billion annually.

Alongside the surcharge ban, the RBA has implemented lower caps on interchange fees, reducing the maximum rate for consumer credit cards from 0.8% to 0.3%. While intended to lower costs for merchants, banks have already begun reducing credit card rewards and benefits to offset the loss in revenue.

Small businesses have expressed significant concern, warning that they may be forced to absorb the transaction costs or increase base prices to maintain profit margins. The Australian Taxation Office (ATO) has also responded to the ban by announcing it will cease accepting credit card payments starting November 30 to avoid passing merchant fees on to taxpayers. While large retailers are largely prepared, industry groups suggest some smaller merchants remain ill-equipped for the transition.