Key Highlights

  • Card surcharging was removed from 1 October 2026, alongside lower caps on domestic interchange fees.
  • Governor Bullock said several large providers have cut card processing fees for small businesses and competition is showing signs of increasing.
  • The RBA's expected benefit of around $910 million a year in lower wholesale card costs is an estimate of the reform's full effect.

Almost a month after card surcharges were removed, Governor Michele Bullock has given senators a first read on the reform: some large providers have cut fees for small businesses, and competition is showing signs of increasing.

On 1 October 2026, one of the most visible changes to Australia's payments system in years took effect. Surcharging on debit and credit cards ended, and reductions to domestic interchange fee caps came into force on the same day. For shoppers, the change was simple: no extra percentage added at the checkout for paying by card.

Four weeks later, on 28 October, Governor Michele Bullock gave the Senate Economics Legislation Committee an early assessment. In her Opening Statement to the Supplementary Budget Estimates hearing, delivered by videoconference, she confirmed: "Card surcharging was removed from 1 October". She said several large providers have cut card processing fees for small businesses and that competition is showing signs of increasing.

It is an early snapshot, not a final verdict. But it offers the first official indication of how the market is responding.

What changed on 1 October

The reforms stem from the Reserve Bank of Australia's (RBA) Review of Merchant Card Payment Costs and Surcharging, whose Conclusions Paper was published in March 2026. As the Governor told senators, the Payments System Board concluded that removing card surcharging, reducing interchange fee caps and improving transparency was in the public interest.

The changes that began on 1 October were:

  • an end to surcharging on debit and credit card payments
  • lower caps on domestic interchange fees, the wholesale fees that form part of what merchants pay to accept cards.

The commercial credit card interchange cap was retained at its current level. This article does not state the new cap levels, as those specific figures are not part of the verified information available today.

Why the RBA acted

The Conclusions Paper set out the problem the reforms were designed to address. It found that 16 per cent of merchants were surcharging and that the prevalence of surcharging had doubled since 2022.

The RBA also estimated the scale of what cardholders were paying. "Consumers are estimated to be paying $1.6 billion of a total $1.8 billion in card payment surcharges" each year, according to the paper. With surcharging now removed, those payments no longer appear as a separate line at the register.

The other side of the reform was aimed at merchants. Lower interchange caps are expected to cut merchants' wholesale card costs "by around $910 million per year", according to the RBA's estimate. The logic is that if businesses can no longer pass card costs directly to customers through a surcharge, the cost of accepting cards should also come down.

Taken together, the two estimates describe a shift in how the cost of card payments is handled. Under surcharging, a large share of that cost was passed to consumers as a visible add-on at the point of sale. Under the new settings, the RBA's focus moves to lowering the underlying costs that merchants face in the first place, and to making those costs easier to see and compare.

The early signals

The Governor's comments to senators point to two developments in the first weeks.

The first is price cuts. Several large providers have reduced card processing fees for small businesses. Small businesses typically pay these fees to the companies that provide their payment terminals and process their transactions, so lower charges directly affect their costs.

The second is competition. The Governor said competition is showing signs of increasing. That matters because the interchange cap reductions apply at the wholesale level; whether merchants see the full benefit depends partly on whether providers pass those savings through in the prices they charge.

What the Governor did not provide, at least in the facts verified today, is a quantified measure of the effect so far. There is no published figure yet on how much merchants' actual costs have fallen in October, or how far shoppers' total spending at the checkout has changed. Four weeks is a short period, and comprehensive data typically takes time to collect.

What's still to come

The 1 October changes were only the first stage. Further elements of the reform take effect on 1 April 2027, including the foreign card interchange cap and some transparency changes. Under the transparency measures, eftpos, Mastercard, Visa and large acquirers must publish the fees they charge, and businesses are to receive standardised fee information on their statements.

These measures are intended to make it easier for merchants to compare what they pay and to shop around, which could reinforce the competitive pressure the Governor described.

There is also a wider review under way. The Governor told senators that the Review of Payments System Regulation released an Issues Paper in June, and stakeholders raised topics including mobile wallets, three-party card schemes, account-to-account payments and agentic commerce. "We intend to release regulatory priorities by the end of 2026," she said, with further consultation on prioritised issues by mid-2027.

On the RBA's calendar, the Payments System Board is next scheduled to meet on 19 November 2026, followed by a meeting on 24 February 2027.

More broadly, the payments update was one part of a statement dominated by inflation and interest rates. On the same day, the Australian Bureau of Statistics reported headline CPI of 4.3% over the 12 months to September 2026 and trimmed mean inflation of 3.6%. The Monetary Policy Board meets on 2–3 November, with its decision, not yet made, due at 2.30 pm (AEDT) on 3 November.

The surcharging reform is separate from that decision. It is a regulatory change by the Payments System Board aimed at the cost and fairness of card payments, rather than a monetary policy tool.

The bottom line

Four weeks into the post-surcharge era, the Governor's first assessment is cautiously positive: surcharges have gone, several large providers have cut fees for small businesses, and competition shows signs of increasing. The RBA's expected benefits, including around $910 million a year in lower wholesale card costs for merchants, are estimates of the reform's full effect rather than results already measured. With transparency rules arriving in April 2027 and regulatory priorities due by the end of 2026, the reform's longer-term impact will become clearer over the coming months.