RBA Reforms Ban Card Surcharges, Lower Interchange Fees to Follow

The Reserve Bank of Australia (RBA) has implemented reforms aimed at reducing card payment costs for businesses, particularly small ones. From October 1st, card surcharges on eftpos, Mastercard, Visa, and American Express payments will be banned, covering credit, debit, and prepaid cards.

This move does not eliminate the cost of card transactions for merchants; it simply removes the option to pass this cost on to customers through a separate fee. The RBA estimates that about 16% of Australian businesses currently surcharge, which means they may choose to raise their sticker prices or absorb the cost.

To offset the impact of the ban, the RBA has lowered maximum interchange fees for consumer credit and debit card payments. This reduction in wholesale costs should help lower card payment costs for businesses, especially small ones.