These changes will take pressure off consumers and businesses and help with the cost of living.

People shouldn’t be punished for using a credit or debit card.

Australians should be able to use debit and credit cards without being penalised, and that’s what this change will help to deliver.

In late 2024, the Albanese Labor Government announced that we were prepared to ban debit card surcharges to help with the cost of living, subject to further work by the Reserve Bank and safeguards to ensure both small businesses and consumers can benefit.

In response to this, the Reserve Bank will today take steps to end credit and debit card surcharging from 1 October.

They will also implement changes that will reduce costs for millions of small businesses and help them get a better deal.

This includes lowering interchange fees and new requirements on card companies and banks to be more transparent about the fees they charge.

The RBA’s three‑part regulatory reform package to lower the cost of doing business and simplify payments for Australian consumers and businesses includes:

• Removing card surcharges on card payments made on the eftpos, Mastercard and Visa networks, through amending existing rules to allow these card companies to ban surcharging in their contracts with businesses
• Amending interchange fees to reduce caps on domestic‑issued credit, debit and prepaid cards, and introduce caps on interchange fees on foreign‑issued cards used in Australia.
• Making other fees more transparent by requiring card schemes and acquirers to publish more transparent data on interchange fees, acquirer services fees and margins, and scheme fees, and explain how interchange reductions are being passed on to retailers.

These changes will:

• Give consumers certainty about the total cost of goods and services when they pay by card.
• Lower fees for businesses by about $910 million per year, with small businesses expected to benefit from bigger fee reductions than large businesses.
• Boost competition in the card payments market.

The current surcharge rules are difficult to follow and customers are often slugged with surprise surcharges at the checkout, in‑store, online or at the café or pub.

Around 16 per cent of Australian businesses collect card surcharges. The RBA estimates Australians pay around $1.6 billion of card surcharges every year.

Small businesses will no longer have to wade through complex surcharging rules and will be armed with more information so they can shop around for card payment services that meet their needs.

The Australian Small Business and Family Enterprise Ombudsman will help small businesses understand changes and ensure they are well positioned to benefit from the reduction in costs.

The RBA and the Australian Competition and Consumer Commission (ACCC) monitor progress of the package as it is rolled out across the economy. The ACCC will update its guidance materials so businesses can be clear about how they meet their obligations under the Australian Consumer Law.

These changes will make the card payments system fairer, more efficient, more transparent, and benefit both consumers and businesses.

Australians are under cost‑of‑living pressure and the conflict in the Middle East is compounding that pressure.

Ending credit and debit card surcharges and reducing interchange fees will ensure consumers aren’t hit with surprise costs and save consumers and businesses money.

The Albanese Government is focused on inflation, productivity and resilience and global uncertainty, at the same time as we provide responsible cost‑of‑living relief and the RBA’s work on payments and ending card surcharges will make a meaningful difference.