The Future of Card Surcharges in Australia
The small additional fee that appears when you tap your card to pay for a coffee or a newspaper could soon disappear. For many Australians, these charges have become a routine part of everyday spending. However, the country’s payments system is undergoing a potential transformation that could change how these fees are handled. Whether this shift will simplify transactions or quietly move costs elsewhere remains a topic of debate.
Why Card Surcharges Exist
Card surcharges were introduced years ago as a way for businesses to recover the cost of processing electronic payments. Every time a customer uses a card — whether by tapping, swiping, or inserting it — the retailer pays a fee to banks and payment networks like Visa, Mastercard, or eftpos. These fees include interchange fees, which are paid to the cardholder’s bank and help support the payment network.
For large retailers, these costs may be manageable. However, for smaller operators such as cafes, newsagents, and convenience stores, the fees can accumulate quickly. With hundreds of small transactions each day, the cumulative effect over a month can be significant.
Surcharging allowed businesses to pass these costs directly to customers rather than spreading them across all product prices.
RBA Review Could Remove Card Surcharge Fees
The Reserve Bank of Australia (RBA) has been reviewing these charges as part of its merchant card payment costs and surcharging review. This process could lead to a ban on surcharge fees for card payments. Originally scheduled to conclude in December 2025, the timeline was extended while regulators examined how changes might affect both businesses and consumers.
Payment systems are complex, and any changes could have wide-reaching implications. If surcharges are removed, Australia would align more closely with other economies where card processing costs are typically included in product prices rather than shown separately at checkout.
Supporters of the change argue that it would make pricing clearer for consumers. Critics, however, worry that it could simply hide the cost rather than remove it.
Payment Companies Support Removing Surcharges
Major payment networks have largely supported the idea of removing surcharges. Richard Wormald, former president of Mastercard Australasia, has argued that Australia is an outlier for continuing to allow surcharges. He claims that card payments are already efficient and relatively low-cost compared to other methods.
Wormald believes that removing surcharges would reduce friction for customers and improve transparency. According to this perspective, customers are already paying those costs — they just appear in a separate line rather than being included in the advertised price.
Small Businesses Fear Higher Hidden Costs
Not everyone in the industry is convinced about the benefits of removing surcharges. The Independent Payments Forum, which represents around 120,000 small businesses, has criticized the proposal, arguing it could create unintended consequences.
Its chair, Brad Kelly, claims that removing surcharges might increase pressure on small retailers. Without the ability to display processing fees directly, businesses may have no choice but to build those expenses into their overall pricing. In other words, customers could still end up paying the same amount — just in a less visible way.
Kelly has also called on the RBA to address what he describes as blended pricing, a system where debit and credit card processing fees are grouped together under a single percentage rate. Since most Australian transactions are debit payments, critics argue this can lead to higher-than-necessary costs.
Growing Debate Over Fairness in Card Payment Fees
Another concern raised during the review is the large gap between what small businesses and large corporations pay for payment processing. Major retailers often negotiate lower rates with banks and card networks, while smaller operators typically pay more per transaction. In some cases, the difference can be dramatic — several cents per transaction for small businesses compared with around one cent for large retailers.
Critics say this imbalance hurts competition and adds extra pressure to already tight margins in sectors like hospitality and retail.
For everyday consumers, the outcome of the RBA review could reshape how payments look at the checkout. The familiar card surcharge may disappear from receipts. But whether that actually lowers costs — or simply moves them into the base price — is something economists, businesses, and regulators are still debating.
