Australia Ditches Debit and Credit Card Surcharges Amid New RBA Rules

The Reserve Bank of Australia (RBA) has implemented new rules that bar businesses from adding surcharges to Mastercard, Visa, and EFTPOS transactions starting October 1.

This means retailers can no longer charge customers extra for paying by card in person or online. Most large payment service providers intend to remove surcharging functionality from their terminals by the deadline.

To offset the loss of revenue for merchants, the RBA is lowering interchange fee caps. For domestic-issued consumer credit cards, the cap will fall from 0.8% to 0.3%. Interchange fees for foreign-issued cards will be capped at 1% starting April 1, 2027.

The RBA estimates that eliminating surcharges will save consumers $1.6 billion annually. However, businesses could choose to absorb the cost of accepting cards or pass some of it on through higher prices, as predicted by Ben Danner, Senior Analyst at Javelin Strategy & Research: 'It's less of a headache for consumers who are being surcharged to use their cards at the point of sale, but many merchants will need to absorb those costs of card acceptance that they were trying to reduce through surcharging.'