Key Highlights

  • Domestic card interchange caps were reduced from 1 October 2026.
  • Interchange is one component of a merchant's costs, not the whole.
  • How much any saving flows through depends on the provider, pricing and card mix.
  • The Payments System Board meets on 19 November 2026.

Since 1 October 2026, lower caps on interchange for domestic card transactions have applied alongside the end of card surcharging, changing the Economics of a tap at the checkout even if shoppers see little of it directly.

At the till, a card payment looks the same as it did in September. The terminal lights up, the card is tapped or inserted, and the sale goes through. What has changed sits underneath. From 1 October 2026, two parts of the Reserve Bank of Australia's (RBA) retail payments reforms began operating together: the removal of surcharging on debit and Credit cards, and reductions in the interchange caps for domestic card transactions.

The fee you never see

Interchange is one of several fees bundled into the cost of accepting a card payment. It passes between the institutions involved in a transaction, typically between the business's payment provider and the cardholder's bank. Shoppers do not pay it as a line item, and many businesses only see it folded into a broader merchant service fee.

A cap sets a ceiling on how much interchange can be. Domestic card transactions were already subject to caps; the reform reduced them. The direction of the change is the key point: the ceiling on this component of card acceptance costs is now lower for cards issued in Australia.

Before and after at the checkout

The easiest way to understand the change is to compare the till before and after 1 October.

Before 1 October 2026

  • Some businesses added a Surcharge when a customer paid by debit or credit card.
  • Domestic interchange was capped at the previous, higher levels.
  • Whether a customer paid a surcharge depended on where they shopped.

From 1 October 2026

  • Surcharging on debit and credit cards has ended. In the words of the review: "Surcharging on debit and credit cards should end from 1 October 2026."
  • Domestic interchange caps are lower.
  • The cost of accepting cards is no longer passed on through a separate surcharge.

For customers, the most visible difference is the absence of a card surcharge. The RBA's survey found that 76 per cent of consumers want surcharging to stop, so this is the part of the reform many people were waiting for. For businesses, the lower interchange cap is part of the same package, reducing the ceiling on one of the components of what they pay to accept cards.

Why the two changes were paired

Removing surcharging on its own would have left businesses absorbing their card acceptance costs without any change to those costs. Lowering domestic interchange caps at the same time addresses part of that cost base. The two measures can be read as working in tandem: one removes the ability to add a surcharge at the till, and the other reduces a ceiling on fees that sit behind the transaction.

It is important not to overstate what a lower cap guarantees. Interchange is one component of a merchant's costs, not the whole. How much of any reduction flows through to an individual Business depends on its provider, its pricing arrangements and the mix of cards its customers use. Whether any of it is reflected in prices at the shelf is a further question that cannot be answered from the reform documents alone.

The reforms also require eftpos, Mastercard, Visa and large acquirers to publish the fees they charge. For a business trying to understand what the lower domestic caps mean for its own costs, published fees provide a reference point. A business that can see what is charged is better placed to understand its statement and to compare arrangements, although the decision whether to act on that information is a commercial one for each business.

Not every element of the package arrived in October. A cap on interchange for foreign-issued cards and some transparency changes come into effect "later, on 1 April 2027". That means businesses with many international customers will see the full set of changes only from next year.

A note on the broader cost backdrop

They are, however, taking effect while households are paying close attention to prices. Headline Inflation was 4.3 per cent in the year to the September month on the monthly CPI indicator. On the quarterly measures, the November Statement on Monetary Policy reported that "Headline inflation was 3.9 per cent over the year to the September quarter and trimmed mean inflation was 3.7 per cent." The trimmed mean is a measure of underlying inflation.

On 3 November, the Monetary Policy Board raised the cash rate target by 25 basis points to 4.85 per cent. Governor Michele Bullock said at her media conference: "Returning inflation to target is our priority, and we will do what is necessary to achieve that." Changes to card fees operate on a much smaller scale and through a completely different channel, but they share the same backdrop of cost-conscious consumers and businesses.

The RBA's Payments System Board meets on 19 November 2026, according to the RBA calendar.

The bottom line

The lower domestic interchange caps that took effect on 1 October 2026 are the less visible half of a reform whose more visible half is the end of card surcharging. At the till, shoppers no longer face a surcharge for paying by debit or credit card. Behind the till, the ceiling on one of the fees businesses pay for accepting domestic cards has come down. The combined effect on any individual business will depend on its own arrangements, and the remaining pieces, including the foreign card cap, follow on 1 April 2027.