Key Highlights

  • The RBA estimated a system cost of around $25 million for removing surcharges on both debit and credit cards.
  • That compares with $45 million for removing debit surcharges only.
  • The broader option took effect on 1 October 2026, alongside interchange cap cuts expected to lower merchants’ wholesale costs by around $910 million a year.

The Reserve Bank's own estimates put the system cost of removing surcharges on both debit and credit cards at around $25 million, below the $45 million it estimated for scrapping debit surcharges alone.

Intuition suggests that a narrower rule should be cheaper to put in place than a broader one. In the case of card surcharges, the Reserve Bank of Australia's (RBA) estimates point the other way. When it weighed up options in its review of retail payments regulation, the RBA estimated that removing surcharging on debit cards only would carry a system cost of $45 million. Removing surcharging on both debit and credit cards was estimated at around $25 million.

The broader option is the one that took effect. From 1 October 2026, surcharging was removed on eftpos, Mastercard and Visa transactions, covering debit, prepaid and credit cards alike.

Two options on the table

The comparison is between two distinct policy designs.

Under a debit-only approach, businesses would have been barred from adding a surcharge when a customer paid with a debit card, but could have continued to surcharge credit card payments. Checkout rules would have depended on the type of card a customer presented.

Under the approach the RBA adopted, card surcharges are removed across debit, prepaid and credit cards on the eftpos, Mastercard and Visa networks. American Express also removed surcharging from 1 October 2026, although Amex is not formally regulated by the RBA.

According to the RBA's estimates, the second design carries the smaller system cost: around $25 million, against $45 million for the first. In other words, the estimated cost of the debit-only option was $20 million higher, or 80 per cent more than the comprehensive option.

What the estimates do and do not say

Both numbers are RBA estimates, and both describe a cost to the payments system as a whole, rather than a cost borne by any single group such as consumers, merchants or banks.

The headline figures themselves do not itemise how each total was reached, and this article does not attempt to reconstruct the RBA's modelling. What can be said is that the comparison runs against the assumption that doing less is automatically cheaper. A rule that applies uniformly across card types is simpler to describe at the checkout than one that splits debit from credit, though the published totals are the RBA's estimates and the component reasons for the gap are a matter for the detail of its analysis.

Readers wanting the full workings can turn to the RBA's Conclusions Paper from the review, released with a media release on 31 March 2026. It is also worth keeping scale in view: the gap between the two options is $20 million in estimated system cost, a figure that sits against much larger flows elsewhere in the card system.

The much larger numbers around it

The system cost estimates are modest next to other figures in the review.

The RBA found that "Consumers are estimated to be paying $1.6 billion of a total $1.8 billion in card payment surcharges" a year across designated networks. It also noted that surcharging was concentrated, referring to "the 16 per cent of merchants that currently surcharge" at the time of the review.

Alongside surcharge removal, the RBA cut several interchange caps, which set limits on part of the wholesale cost of card payments. It expects the changes to lower wholesale card payment costs for merchants "by around $910 million per year", with small businesses expected to benefit most. The changes were:

  • the domestic debit and prepaid cap lowered to 8 cents (or 0.16 per cent ad valorem), from 10 cents or 0.2 per cent;
  • the domestic consumer credit cap lowered to 0.3 per cent from 0.8 per cent, with the benchmark removed;
  • the commercial credit cap kept at 0.8 per cent, with the benchmark removed; and
  • a new single cap of 1.0 per cent on transactions using foreign-issued cards, which were previously unregulated.

Set against $1.8 billion in annual surcharges and an expected $910 million a year in lower wholesale costs, the difference between a $25 million and a $45 million system cost is small in dollar terms. It does mean that, on the RBA's own estimates, the option that took effect was not only broader but also less costly to the system than the narrower alternative.

What actually changed on 1 October

The ban is specific. It covers only surcharges added because a customer pays by card. Several other charges are not affected. Weekend and public holiday surcharges, booking fees and service fees remain outside the ban, as do the fees payment service providers charge businesses for terminals and processing.

Businesses still face card acceptance costs, and the RBA's FAQ is clear on where those can go: "Those costs can be reflected in a business's overall pricing." The FAQ adds that businesses can review payment plans, shop around for providers and offer discounts for particular payment methods, with ACCC guidance on pricing displays applying.

The coverage is broad. Business-to-business payments are not exempt unless network rules or law provide otherwise, and not-for-profits are not exempt. Invoices issued before 1 October but paid on or after that date may no longer be surcharged. Taxis remain under state and territory regulation, and surcharges on non-card payments are not regulated by the RBA. On exemptions more generally, the FAQ states: "Whether any exemptions are available is a decision for each card network, not the RBA."

Most of the review's changes, including surcharge removal and the lower domestic caps, took effect on 1 October 2026. Some payment-cost transparency changes take effect later, on 1 April 2027. Separately, designated networks are to publish aggregate interchange and scheme fee data quarterly.

The bottom line

The RBA estimated a system cost of around $25 million for removing surcharges on both debit and credit cards, compared with $45 million for removing debit surcharges only. The broader option, which also delivers a single rule across card types, is the one that took effect on 1 October 2026, alongside interchange cap cuts the RBA expects to lower merchants' wholesale costs by around $910 million a year. The figures are RBA estimates, and the detailed reasoning sits in its Conclusions Paper.

The $25 million and $45 million figures compare estimated implementation costs of alternative regulatory options; they are not estimates of total savings across the economy.