The Reserve Bank of Australia (RBA) has proposed major reforms to the existing card payment and surcharging regulatory landscape in Australia.
On 15 July 2025, with the recommendations of the Payments System Board (PSB) the RBA released a Consultation Paper outlining the following significant changes:
- Removing surcharging on all designated debit, prepaid and credit card systems;
- Lowering the cap on domestic interchange fees paid by businesses; and
- Increasing fee transparency by requiring card networks and large acquirers to publish card payment costs.
The proposals are made following the October 2024 Issues Paper and extensive public consultation with stakeholders. We discuss the most significant changes below.
Amendments to Surcharging Rules
The RBA considers the most appropriate option to address the current surcharging framework issues is to remove surcharging for all designated debit, prepaid and credit card systems. The current system allows for merchants to recoup the costs of card acceptance through applying a surcharge on card transactions.
It is suggested that the removal of surcharging would increase competition, given the incentive for merchants to make efficient payment choices through their payment plans. This proposal has however raised concerns for the industry.
Amendments to Interchange Fees
The RBA highlights concerns that interchange fees paid by businesses to card providers are too high. Interchange fees are established by card networks but are subject to both the RBA's weighted-average benchmarks as well as 'ceilings' on individual interchange categories to reduce card payment costs.
The RBA has notably proposed to reduce the domestic credit interchange cap to 0.3% of transaction value and prepaid interchange weighted-average benchmark and cap to $0.6 cents per transaction.
While the RBA have published their rationale for lowering the interchange caps, there is a risk that the proposed changes will substantially damage competition and innovation amongst payment providers. In comparison, the Commerce Commission of New Zealand made a final decision in its payments review to keep domestic interchange fees uncapped, and foreign-issued cards capped at just 0.6% for in person debit cards in order to preserve competitive pressure and ensure savings are passed on to merchants and consumers.
Transparency of Wholesale Fees
The RBA has proposed requiring card networks to publish both aggregate interchange and scheme fee data, broken down by key transaction types. The RBA has also signalled that it will set an expectation that card networks will work with industry to reduce the complexity of their scheme fee schedules. This approach may have a limited effect on driving down the fees of major card networks as smaller businesses will continue to lack bargaining power as compared to larger businesses.
Next Steps
The RBA invites feedback on the proposed policy options and draft standards by 26 August 2025. It is anticipated that the RBA and PSB will reach final conclusions by the end of 2025.
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