Wednesday, July 16, 2025
Aussies to slash interchange, ban surcharging
The Reserve Bank of Australia released a consultation paper on July 15, 2025, proposing to put an end to merchants assessing surcharges on payments made using Mastercard or Visa debit cards. What’s more, it said the cap on credit card interchange fees paid by businesses need to be lowered, and the card brands and acquirers need to publish the fees they charge.
RBA is Australia’s central bank, and as such has responsibilities for monetary policy as well as policies underlying the nation’s payment system. It works similarly to the Federal Reserve Board in the United States.
Extensive public consultation
In its two-page consultation paper, the RBA said its decisions followed “extensive” public consultation, and would result in equal savings for consumers and businesses. Consumers currently pay about $1.2 billion a year in surcharges, the RBA said, adding that surcharging is no longer steering consumers toward using more efficient payment methods.
“[B]usinesses are increasingly charging the same surcharge rate across debit and credit and there are significant challenges with enforcing the current surcharge rules,” the regulator wrote. “Removing surcharging would make card payments simpler, more transparent and help to increase competition in the card payment system.”
As for lowering the cap on interchange, that move could generate similar savings for businesses – about $1.2 billion in fees a year. “Around 90 percent of Australian businesses are estimated to be better off under the proposed policies,” the RBA stated. Small businesses would benefit most from the proposed reductions in interchange, it added.
Call for transparency
The RBA did move to ban interchange fees on foreign card payments but noted that doing so could lower costs for all businesses that accept international cards.
Requiring the card brands and acquirers to publish their fees would improve “transparency and competition,” allow for better understanding of the fees they are charged, and “make it easier for businesses to shop around” for better deals, the RBA wrote.
The RBA said the new policies grew from extensive public comments, although it added that it would accept additional comments through Aug. 26, 2025. Plans are to put the new policies in place by July 2026.
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