The Reserve Bank of Australia announced a landmark ban on card surcharging effective Oct. 1, a sweeping reform designed to eliminate roughly $1.6 billion in annual fees currently slugged to consumers.
In a policy decision handed down on March 31, RBA Governor Michelle Bullock confirmed that the removal of surcharges on Eftpos, Visa, and Mastercard networks will ensure Australians pay only the "sticker price" at the point of sale.
While American Express remains exempt pending a future review, the RBA's broader overhaul targets a reduction in merchant costs to prevent businesses from passing on payment expenses through general price hikes.
The reforms extend beyond the checkout counter, aggressively slashing interchange fee caps to provide much-needed relief to small businesses, which have historically paid disproportionately higher rates than major retailers.
Under the new guidelines, domestic credit card caps will drop to 0.3%, while debit cards will be capped at 8 cents or 0.16%.
The adjustments are expected to strip $660 million in annual revenue from card providers.
To foster a more competitive landscape, the RBA will also mandate standardised fee disclosure on business statements, enabling merchants to compare providers with greater ease.
Bullock emphasised that "surcharging no longer works as intended," noting that the current system is fraught with complexity and poor disclosure.
Following this review, the central bank will shift its focus to digital wallets and "buy now, pay later" schemes as part of a continued effort to modernise Australia’s payment infrastructure.