RBA Ban on Surcharge Fees
For years, Australian consumers tapping their debit or credit card for a morning flat white or paying for groceries have been met with an unexpected extra fee at the terminal. Following extensive review and regulatory reform by the Reserve Bank of Australia (RBA), that practice is coming to an end. This article will give you an overview of what is changing, how the reforms work, and the typical costs associated with different payment methods across Australia.
What is Changing?
Under previous regulations, Australian businesses were legally allowed to pass on the direct cost of card processing to customers via payment. Under the RBA's retail payments reforms:
Businesses can no longer add extra checkout fees for payments made on designated payment networks—including Eftpos, Mastercard, and Visa. Major non-designated schemes such as American Express, JCB, and UnionPay have also aligned with the framework to implement "no-surcharge" rules.
Major banks and payment service providers (including Commonwealth Bank, Westpac, NAB, ANZ Worldline, and Square) are disabling surcharge capabilities directly on merchant terminals and invoicing platforms.
Businesses are no longer permitted to add surprise percentages or fees at the point of sale; instead, ordinary card transaction expenses must be incorporated into standard menu or shelf prices. Businesses cannot circumvent the ban by rebranding card surcharges as "processing fees," "card handling fees," or manipulating cash discounts to simulate a card penalty.
The ban only applies to payment-method surcharges. It does not ban general operational surcharges, such as Sunday/public holiday hospitality surcharges or legitimate booking/delivery fees, which remain governed under general Australian Consumer Law (ACL) rules administered by the ACCC.
To prevent small businesses from simply having to absorb high card fees without recourse, the RBA balanced the surcharge ban with mandatory reductions in interchange fee caps. By cutting wholesale transaction interchange rates—including dropping small business credit card interchange caps down to as low as 0.3%—payment acceptance costs for retailers are significantly reduced.
Payment Methods and Costs
The fee a business pays to process a payment (known as the Merchant Service Fee) varies considerably depending on whether the card is domestic or international, standard debit, or a rewards credit card. The table below breaks down the typical merchant acceptance costs for common payment methods in Australia
Payment Method | Cost |
Cash | 0.0% |
Direct Deposit EFT | 0.0% |
Eftpos | 0.1% - 0.5% |
Visa & MasterCard (Debit) | 0.5% - 1.0% |
Visa & MasterCard (Credit) | 0.8% - 1.5% |
Visa & MasterCard (Rewards & Frequent Flyer Cards) | 1.5% - 2.5% |
American Express | 1.3% - 2.5% |
Afterpay, Zip, Etc | 3.0% - 6.0% |
Best Practice
Most of the major accounting and payment services (such as Xero, Stripe, etc) will automatically change to ensure your business is compliant with the new laws. However, we recommend double checking that payment surcharges are no longer being passed on manually as well. You should also assess how much the additional costs are going to effect your business and encourage customers to pay with lower cost options, such as cash or direct deposit.
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