(March 31): The Reserve Bank of Australia (RBA) won’t allow surcharges on debit and credit cards from October, a move that will hit banks’ revenue and bring the country in line with peers in Europe and the UK.
The nation’s central bank said it will also lower the cap on credit card interchange fees that are paid to banks by merchants, according to a Tuesday statement. The move will impact card surcharging on the Eftpos, Mastercard and Visa card networks.
“Removing surcharging would make card payments simpler, more transparent and increase competition among payment service providers,” the RBA said. It also “aligns with the preference of most consumers for payment costs to be incorporated into advertised prices”.
The decision marks the culmination of a hotly contested debate in Australia, including a months-long process that examined transaction fees. The RBA has argued it could save consumers around A$1.2 billion (US$822 million or $1.06 billion) a year, while banks have contested its merits.
Most changes will come into effect on Oct 1, the RBA said. The introduction of the interchange cap on foreign cards and some changes to payment cost transparency won’t happen until April 1, 2027.
Australia will join Europe, Canada, the UK and the US in imposing a ban on debit card charges. The UK and European Union have a regulatory ban on credit card surcharging.
See also: Maybank completes on-chain tokenised FX and cross border payment via MYR-SGD corridor
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