Key Highlights

  • RBA's Ellis Connolly said interchange reductions for domestic cards took effect on 1 October 2026, with international card adjustments due on 1 April.
  • The stated aim is pass-through to small-business merchant service fees, and clearer pricing for shoppers rather than lower shop prices.
  • The RBA expects to publish payments-review priority areas by the end of 2026, with regulatory Options consulted on around mid-2027.

Card payments are part of almost every household and small-business budget, yet few people see the fees behind them. The Reserve Bank of Australia says reductions to card interchange fees began on 1 October 2026, and that the aim is for those savings to reach small-business merchants. Whether shoppers notice is a separate question.

What was said and when

Ellis Connolly, Head of Payments Policy Department at the RBA, spoke at the AFIA Conference in Sydney on 20 October 2026, in a fireside chat moderated by Diane Tate. He said interchange reductions for domestic cards took effect on 1 October, with adjustments for international cards due on 1 April. The aim, he said, is pass-through to small-business merchant service fees.

These are Connolly's remarks as an RBA official. They are not a new Board decision.

Fees, surcharges and transparency

Connolly said the surcharging reforms aim at price transparency, so advertised prices match what consumers actually pay. He said cards account for 75 per cent of payments, according to the survey he cited. Large acquirers and card schemes must publish more fee data so merchants can compare providers.

Connolly framed the work around three strategic priorities: a resilient payment system, a competitive, accessible and innovative system, and shaping the future of money. He said trade-offs between objectives exist, particularly on competition, but that complementarities are more common, since a choice of payment methods improves resilience.

That last point matters. Lower interchange only helps a Business if its payment provider passes the saving on, and comparison data makes that easier to check.

A wider review is under way

The RBA began a review of payments regulation with an issues paper in June 2026 and received about 70 submissions. Connolly said priority areas are expected to be published by the end of 2026, with regulatory options consulted on around mid-2027.

He said the RBA prefers industry-led solutions where they work, and would consider using its standards or access powers where regulation would achieve a better outcome. He also said a consultation would precede any regulatory action.

Mobile wallets and new technology

Connolly said nearly half of card payments go through mobile wallets, according to RBA data. Stakeholders have raised concerns about access to phone payment technology, fees and commercial terms. He said concerns about agentic commerce, where software acts on a buyer's behalf, centre on trust, authorisation, security and liability.

What it means for readers

For small businesses, the main task is to ask their provider how the interchange changes will appear in their merchant fees. For shoppers, the stated aim is clearer pricing, not lower prices in the shop. Nothing in Connolly's remarks promises cheaper goods or fewer surcharges at the till.

Uncertainties

Connolly stressed that the RBA must balance affordability for end users against incentives for providers to invest in safety and innovation. He also said the RBA's process for regulatory change can take 18 months to two years, which allows time for evidence-gathering. The timing of any new rules is therefore not settled.

He also described operational resilience as a significant risk, noting concentration among shared third-party providers and growing cyber threats.

What to watch next

The RBA expects to publish its priority areas by the end of 2026. International card interchange adjustments are due on 1 April 2027. Businesses should watch for the fee data that large acquirers and card schemes must publish, and for any consultation paper around mid-2027.