Global: Reserve Bank of Australia Moves to Cap Interchange Fees, Ban Card Surcharges

The Reserve Bank of Australia (RBA) has announced a series of payment sector reforms, including plans to cap interchange fees and eliminate merchant surcharges, as part of efforts to enhance competition, transparency, and regulatory compliance within the payments ecosystem.

The reforms follow an extensive public consultation process that began with the release of a consultation paper in July 2025. The new measures are aimed at simplifying card payments for consumers while reducing operational costs for businesses and strengthening regulatory frameworks governing payment systems.

Under the proposed changes, surcharges on debit, prepaid, and credit card transactions will be prohibited. The RBA noted that removing surcharging aligns with consumer expectations for pricing transparency, where payment costs are embedded in advertised prices rather than added at checkout.

The central bank stated that the initiative is designed to create a more transparent and competitive environment, supported by improved compliance monitoring tools and enhanced regulatory reporting standards across payment service providers.

In addition to banning surcharges, the RBA will introduce lower caps on interchange fees, which are fees paid between banks during card transactions. The reduction is expected to decrease costs for businesses accepting both domestic and international card payments, contributing to improved financial compliance and more efficient compliance management systems.

The reforms also include new transparency requirements for fees charged by card networks and payment providers. These measures are intended to strengthen compliance analytics, enable better risk assessment, and empower businesses to compare service providers more effectively, fostering increased competition.

Most of the changes are scheduled to take effect from October 1, 2026, including the removal of surcharges and revised interchange fee caps for domestic transactions. Additional measures—such as caps on foreign-issued cards and expanded transparency rules—will be implemented from April 1, 2027, allowing industry participants time to adapt and ensure full regulatory compliance monitoring.

Looking ahead, the RBA plans to initiate further public consultations in mid-2026 to evaluate the need for regulating emerging payment channels, including mobile wallets, three-party card networks, buy-now-pay-later (BNPL) services, and e-commerce platforms. This reflects a broader commitment to strengthening regulatory risk management and adapting to evolving RegTech industry trends.

The reforms highlight the increasing role of central banks in shaping modern payment systems through compliance technology, regulatory intelligence, and policy interventions that balance innovation with consumer protection.

Overall, the RBA’s initiative is expected to drive a more competitive, transparent, and efficient payments landscape, while reinforcing strong regulatory compliance frameworks across Australia’s financial system.