Credit card surcharges—one of those sneaky little fees that make us groan at the checkout. With some countries already banning them, could Australia be next? While consumers would love to see them go, businesses argue they’re a necessary evil to cover transaction costs. The debate is heating up, and with government reviews underway, big changes could be just around the corner.
The Reserve Bank of Australia (RBA) launched a Merchant Card Payment Costs and Surcharging Review in October 2024 to assess whether current regulations are still fair and relevant. With payment technology evolving faster than ever, the review is looking at transparency, transaction fees, and whether consumers and businesses are getting a fair deal.
At the heart of this review is one big goal: reducing costs for both businesses and consumers.
Most customers see surcharges as an annoying extra cost—kind of like paying for air at a petrol station. Meanwhile, the Australian Banking Association (ABA) argues that the current system isn’t working. They believe consumers shouldn’t be charged for bundled costs like point-of-sale (POS) systems, business software, or merchant reward schemes.
The debate ramped up even further when the government announced plans to ban debit card surcharges from 1 January 2026, pending the final RBA review. If a credit card surcharge ban follows, businesses will need to make a choice: absorb merchant fees or adjust pricing structures to cover the cost elsewhere.
For many businesses, the issue isn’t about wanting to charge fees—it’s about the sheer cost of accepting card payments. While cash transactions are fee-free, card payments come with merchant charges, and small businesses are hit the hardest.
In Australia, smaller merchants pay up to three times more per transaction than large retailers, who can negotiate lower wholesale rates. Even within the small business sector, fees vary widely, ranging from under 1% to over 2% per transaction.
To level the playing field, the RBA is considering solutions such as capping interchange fees and allowing transactions to be routed via the lowest-cost option. Whether these changes will be enough remains to be seen.
The way we pay has changed dramatically over the years, with digital wallets and contactless payments becoming the norm. That means surcharges are something most Australians deal with daily.
According to the Australian Banking Association:
Given how dominant card and digital transactions have become, any surcharge changes will have widespread consequences.
Before the RBA introduced surcharge regulations, businesses could slap on flat-rate fees of 3% or more, regardless of their actual costs. Today, surcharges must reflect the real cost of accepting payments. Here’s how it works:
According to the RBA, the average card processing fees in Australia are:
| Card Type | Average Fee |
|---|---|
| Eftpos | Less than 0.5% |
| Visa/Mastercard Debit | 0.5% - 1% |
| Visa/Mastercard Credit | 1% - 1.5% |
Excessive surcharging is illegal for eftpos, Visa, Mastercard, and Debit Mastercard payments. The Australian Competition and Consumer Commission (ACCC) has seen a spike in complaints, receiving nearly 2,500 reports of excessive surcharges in just 18 months from early 2023.
If your business charges GST on goods and services, then GST must also apply to any surcharge payments. Businesses need to ensure they factor this into their pricing strategies to stay compliant.
With debit card surcharges already on the chopping block, credit card surcharges could be next. If that happens, businesses will need to rethink their pricing strategies, whether that means absorbing costs, increasing prices, or finding alternative payment solutions.
For now, we’re waiting on the RBA’s final decision. Whether they scrap surcharges altogether or introduce more regulations, one thing’s for sure—big changes are coming.