Card Payment Reform Puts Travel Insurance Distribution Under Pressure

Australia's card payment system is undergoing significant changes that may disrupt one of the travel insurance sector's most important distribution channels.

The Reserve Bank of Australia's (RBA) Conclusions Paper, published in March 2026, confirmed a ban on card payment surcharges and reductions to interchange fee caps, which will take effect on October 1, 2026.

This shift is expected to reduce issuer interchange revenue by an estimated $660 million per year, with the bulk of this reduction affecting consumer credit cards.

Banks have already begun acting ahead of the deadline, phasing out complimentary travel insurance on certain cards and raising interest rates or shortening interest-free periods.

The commercial stakes are substantial, with industry analysis estimating that credit card insurance accounts for approximately 28% of the Australian travel insurance market by policy type.