Key Highlights

  • Around 16% of merchants in the surveyed population were surcharging, yet consumers paid an estimated $1.6 billion of $1.8 billion in annual card surcharges on the designated networks.
  • Since 1 October 2026, card surcharges on eftpos, Mastercard and Visa have been removed and interchange caps lowered.
  • Merchant costs are expected to fall by around $910 million a year, while weekend, booking and service fees remain unaffected.

Only around 16 per cent of merchants were adding card surcharges when the Reserve Bank reviewed retail payments, yet consumers were paying an estimated $1.6 billion a year in those fees — the imbalance at the centre of the ban that took effect on 1 October.

Card surcharges were a familiar feature of paying for things in Australia, so it may come as a surprise how few businesses actually applied them. The Reserve Bank of Australia's (RBA) review of retail payments regulation found that surcharging was a minority practice. In its conclusions, the RBA referred to "the 16 per cent of merchants that currently surcharge", measured across all merchants at the time of the review. That is roughly one business in every six.

The small share of surcharging businesses sits against a much larger dollar figure. According to the RBA, "Consumers are estimated to be paying $1.6 billion of a total $1.8 billion in card payment surcharges" each year on the designated card networks.

From 1 October 2026, those surcharges are gone on eftpos, Mastercard and Visa cards — debit, prepaid and credit. This explainer looks at what the one-in-six figure reveals about the old system, how the RBA's cost estimates compared a full ban with a narrower option, and what has replaced surcharging for businesses and their customers.

A minority practice with a large price tag

The RBA's numbers point to a mismatch. Most merchants were not surcharging at all; for them, the cost of accepting cards was not itemised as a separate fee at the checkout. A minority were passing those costs on as an explicit fee at the point of payment, and consumers were bearing the great majority of the total surcharge bill: $1.6 billion of $1.8 billion.

Because surcharges applied only at some businesses, the costs fell unevenly. Two customers paying by card for similar purchases could face different charges depending on where they shopped, while businesses that did not surcharge still carried card acceptance costs in their pricing.

The RBA's estimates also compared a broad ban with a narrower one. It estimated the system cost of removing surcharging on both debit and credit at around $25 million, compared with $45 million for removing debit surcharging only.

What changed on 1 October

The RBA announced the reforms in its Conclusions Paper on 31 March 2026. Most of the changes, including the end of surcharging and lower domestic interchange caps, took effect on 1 October 2026.

The surcharge ban applies to eftpos, Mastercard and Visa transactions. Because it covers debit, prepaid and credit cards alike, the type of card a customer uses on those networks no longer determines whether a card surcharge can be added. American Express also removed surcharging from the same date, although Amex is not formally regulated by the RBA.

The ban is specific: it covers only surcharges added because a customer chooses to pay by card. The RBA's FAQ says card acceptance costs "can be reflected in a business's overall pricing." Several kinds of charges are not affected:

  • weekend and public holiday surcharges
  • booking fees
  • service fees
  • fees charged by payment service providers to businesses for terminals and processing

Some groups that might have expected special treatment are not exempt. Business-to-business transactions are covered unless network rules or the 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. On the question of exemptions more broadly, the FAQ states: "Whether any exemptions are available is a decision for each card network, not the RBA."

Cheaper card acceptance for merchants

The surcharge ban was paired with changes designed to reduce what merchants pay to accept cards in the first place. The RBA estimated its reforms would lower wholesale card payment costs for merchants "by around $910 million per year".

A key lever is interchange — the wholesale fees set by card networks and paid between financial institutions on each transaction. Under the new caps:

  • the domestic debit and prepaid cap fell to 8 cents (or 0.16% for percentage-based fees), from 10 cents or 0.2%
  • the domestic consumer credit cap fell to 0.3% from 0.8%, with the benchmark removed
  • the commercial credit cap stays at 0.8%, with the benchmark removed
  • a new single 1.0% cap applies to transactions on foreign-issued cards, which were previously unregulated

The RBA expects small businesses to benefit most from the changes.

Some payment-cost transparency changes are scheduled to take effect on 1 April 2027. Separately, designated card networks are to publish aggregate interchange and scheme fee data quarterly, broken down by categories including domestic and international, debit and credit, card-present and card-not-present, and tokenised transactions. The tokenised breakdown is intended to shed light on the fees associated with mobile wallets.

What the one-in-six figure means now

For the roughly 84 per cent of merchants that were not surcharging, the ban changes little about how they price, while lower interchange caps may reduce their acceptance costs. For the minority that were surcharging, the change is more significant: card costs can no longer be itemised at the checkout, and the RBA's guidance is that they can be reflected in overall pricing instead.

The FAQ also notes that businesses can review their payment plans, shop around for providers and offer discounts for particular payment methods, with ACCC guidance on pricing displays applying. Surcharges on payment methods other than cards are not regulated by the RBA, and the RBA has informed governments and price regulators about businesses whose prices are regulated.

The bottom line

The RBA's review found that only around one merchant in six was surcharging, yet consumers were paying an estimated $1.6 billion of $1.8 billion in annual card surcharges on the designated networks. Since 1 October 2026, card surcharges on eftpos, Mastercard and Visa have been removed, interchange caps lowered and merchant costs expected to fall by around $910 million a year. Weekend, booking and service fees remain unaffected, and further transparency changes are scheduled for April 2027.

The reported merchant share relates to the population covered by the underlying survey; it should not automatically be extrapolated to all Australian businesses. No-surcharge requirements are implemented through designated card-network rules permitted by the RBA’s regulatory changes.