Australia’s new card payment reforms are another blow to Visa and Mastercard as regulators worldwide respond to merchant frustration over rising fees.
Card payment rules are set for a major overhaul in Australia, with a ban on surcharging and changes to interchange fees announced by the nation’s central bank.
Announced earlier today (31 March) in a paper, the Reserve Bank of Australia published the final decisions of its Payments System Board following a review of merchant card payment costs and surcharging in Australia.
The RBA released a paper asking for feedback on its preliminary proposals in July 2025 after the bank said its existing surcharging were no longer serving its intended purpose of improving competition and efficiency.
The majority of the changes will come into effect on 1 October 2026, with some more complex measures delayed until April 2027 to give the payments industry time to adapt.
What has changed?
Perhaps one of the most significant changes is the removal of surcharges on debit, prepaid and credit cards across eftpos, Mastercard and Visa networks.
Many businesses now apply the same surcharge to all card payments and the decline of cash has reduced consumers’ ability to avoid these fees, which the central bank says has made the system less effective and harder to enforce.
Removing surcharging is expected to simplify payments for consumers, improve price transparency and increase competition between payment service providers. The RBA also noted most consumers prefer payment costs to be built into advertised prices rather than added at the point of sale.
The Payments System Board has also decided to lower caps on interchange fees paid by businesses when accepting card payments. These fees, which are paid between banks, are often passed on to merchants.
The RBA said reducing the caps should lower the cost of accepting both domestic and international cards, with small businesses expected to benefit the most.
The reforms also include measures to improve transparency across the payments system, with card networks and payment providers required to provide clearer information on fees.
According to RBA, greater transparency would strengthen competition across the payments chain and help put pressure on costs over time.
A cap on interchange fees for foreign-issued cards and additional transparency requirements, will take effect from 1 April 2027 due to these presenting more complex changes.
Developments in other markets
Australia’s focus on interchange fees adds more pressure on Visa and Mastercard, which have lately been under a lot of scrutiny in other markets, particularly in Europe.
Earlier this month in the UK, both companies were granted permission to appeal a ruling which found their multilateral interchange fees breached competition law.
The case is being watched given its potential impact on merchants, card schemes and the wider ecosystem. Interchange fees are a common point of tension, with businesses arguing they inflate the cost of accepting cards while being difficult to avoid.
They have also become a catalyst for alternative payment methods. In the UK, rising costs have helped drive interest in account-to-account payments, including pay by bank solutions, which bypass card networks and offer lower transaction fees.
What comes next for Australia
The RBA’s review also states further changes could follow, with the bank confirming plans to launch another public consultation in mid-2026 to examine areas not covered in this review.
This would include mobile wallets, three-party card networks, buy now pay later services and e-commerce platforms.
In September 2025, Australia passed reforms to modernise its payments system, expanding the RBA’s regulatory scope to include emerging services such as digital wallets and buy now pay later.
The legislation also introduced stronger enforcement powers and new tools for addressing issues of national interest, following concerns that regulation has not kept pace with changes in how consumers and businesses make payments.
