RBA determines hidden debit tap and go surcharge to be removed
The RBA has scrapped a hidden fee that was costing Australians $1.6bn a year in a major change for shoppers - but there’s a catch.
One of Australia’s most hated hidden fees has been scrapped, but households aren’t expected to pocket all of the $1.6bn in savings.
On Tuesday the Reserve Bank of Australia released its long awaited review of merchant card payment costs and surcharging.
As part of three key changes, the Reserve Bank says it is removing surcharging on debit, prepaid and credit cards across eftpos, MasterCard and Visa network.
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By continuing you agree to our Terms and Privacy Policy.Instead businesses will be required to include the entire price – including any costs to issue credit - as part of the sticker price.
Currently, Australians are slugged around $1.6bn in surcharge payments every year, while businesses pay $200m to card providers.
The RBA says the current surcharge framework, introduced more than two decades ago, is no longer achieving its intended purpose of steering consumers towards making more efficient payment choices.
“When card surcharges end, the sticker price will be the price that consumers end up paying. Consumers will no longer be surprised at the checkout by an unexpected surcharge for paying by card,” the RBA said in a statement.
The Reserve Bank says these changes are unlikely to impact cost of living pressures, although concedes businesses may try to recoup these surcharge payments through higher costs.
These surcharges will be removed by October 1 2026.
Another change announced by the central bank will lower the amount that businesses pay card merchants to use their services.
Under the changes, the “interchange cap” will be dropped from 0.8 to 0.3 per cent for domestic-issued consumer credit card transactions.
The RBA estimates this will save businesses $910m, with the RBA saying it will take measures to ensure payment providers simply don’t pocket the additional savings.
Changes to businesses will also come into effect from October 1 2026, always the introduction of an interchange cap on foreign cards will start six months later on April 1 2027.
Ms Bullock says these changes should help lower card payment costs for businesses, especially smaller businesses that are usually charged the higher costs to accept payments.
“Of the 16 per cent of Australian businesses that surcharge, it will be up to them to choose whether to include payment costs in their sticker prices when surcharging ends, just as they do with other costs,” The RBA statement said.
Finally, the RBA will increase transparency of card payment fees by acquiring the likes of eftpos, MasterCard and Visa to publish the fees they charge, helping businesses to check and compare.
Originally published as RBA determines hidden debit tap and go surcharge to be removed
