The Reserve Bank of Australia's Payments System Board advanced its most significant retail payments regulation review in a decade, with a Conclusions Paper expected by end of March 2026. The proposals include eliminating surcharging on debit and credit card transactions and lowering interchange fee caps.
Surcharging Ban
Australian consumers currently pay approximately AUD 1.2 billion annually in card surcharges. The proposed ban reverses the RBA's longstanding policy of allowing surcharging as a competitive pricing signal - a policy the Board now considers counterproductive given changed market dynamics. Around 90% of businesses would benefit from the combination of lower interchange and eliminated surcharges.
Lower Interchange Caps
The Board proposed reducing interchange fee caps across debit and credit, potentially saving businesses an additional AUD 1.2 billion per year. It also considered whether commercial credit cards should have different caps than consumer cards, and proposed new caps on foreign interchange fees.
Least-Cost Routing Expansion
The review reinforced the RBA's support for least-cost routing, with the Board examining whether to mandate LCR availability across all channels including Apple Pay - which has resisted eftpos LCR integration.
What This Means
The combined surcharging ban and interchange reduction would represent approximately AUD 2.4 billion in annual savings for Australian businesses and consumers. For Visa and Mastercard, Australia would join the UK as markets where regulators are rapidly restructuring card payment economics. The Apple Pay LCR question could set a global precedent for mobile wallet neutrality requirements.