The Reserve Bank of Australia Reviews Merchant Card Payment Costs
The Reserve Bank of Australia (RBA) has announced a decision to extend the timeline for concluding its scrutinization of Merchant Card Payment Costs and Surcharging to March 2026. The RBA released a summary of the submissions it has received on this topic, which was part of a Consultation Paper circulated in July 2025.
Public Input on Surcharging Ban
According to the RBA, a substantial number of submissions supported the abolishment of surcharging on debit and credit card networks. A smaller portion of submissions indicated that they would prefer to see surcharging on debit cards removed as their first choice. This preference was noted in submissions from several merchants, payment service providers, and financial institutions, who believe that this option would allow them to recover some card payment costs through surcharges while maintaining a price signal on credit.
Surcharging and Business Models
However, the RBA also highlighted the opposition from payment service providers (PSPs) that currently offer blended pricing. These PSPs, along with industry representatives, are strongly against a debit-only surcharge ban as it would disrupt their existing business models.
Independent Payments Forum’s Stand on Surcharging
The Independent Payments Forum, an advocacy group, criticized the RBA for oversimplifying the debate on surcharging. The group opined that the RBA has failed to consider practical ideas to reduce card fees before implementing any surcharge ban. The forum’s co-founder, Brad Kelly, argued that a surcharge ban must be accompanied by robust changes to ensure that small businesses are not subjected to larger fees compared to their large-scale competitors.
Addressing Unfair Fees
Kelly stated that the RBA has misrepresented small businesses as opponents to a surcharge ban. He clarified that small businesses are not against the ban but are concerned about the unfair fees they are being charged. The Forum has proposed several solutions that the RBA can consider before implementing a surcharge ban, including unbundling blended rates, mandating dynamic least cost routing, regulating scheme fees, and further reducing interchange.
As the debate continues, the stakeholders await the final decision by the RBA, now slated for March 2026. The RBA’s actions will have significant implications for the payment landscape in Australia, affecting merchants, financial institutions, and consumers alike.
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