Card payment sucharges banned in Australia from 2026

[TheCollecter]

What really kicked it up into high gear was when the payment service providers starting building the surcharge system into the payment terminal software. Before that it was a hassle to add it on and far fewer places did it. But once it was in the software it became much easier and the providers started advertising that it was "free" for the business, cause now it was an extra cost for the customer.
Then they started bundling in extra services into the cost as well...

You are spot on... when you setup a Square that you buy at office works etc for $60, one of the 1st questions in the setup process is do you want to add a surcharge! That's restaurants and the like using that service (and it wasn't coded for them in the past as you say - it was hard in the old days!)... but in online shopping in AU the surcharge has been there for 20 years...

Many online AU sites to this day at checkout say Visa/MasterCard 0% surcharge, Amex 3%

In summary:
1. Whosoever pays Amex 3% wants their head read,
2. If you can absorb the 1.2-1.4% Visa/MasterCard surcharge, and you are dumb enough to pay Amex 3%, then your Amex surcharge should be max 1.8% as you are happy to absorb 1.2% in your costs already on Visa/MasterCard - meaning you are creaming Amex customers to line your own pockets

Who remembers when Qantas charged a credit card fee of $7 per pax? Not based on cost, just a cash grab? Qantas overhauls its card payment surcharges but not everyone is a winner

 

[TheCollecter]

I actually found an old invoice where CC fee (of $7) equals 4.6% can you believe !

 

[Doctore1003]

Delayed to March 2026

No surcharging clarity until 2026 as RBA pushes out review

The central bank says it needs more time to assess how a surcharge ban and other reform options could shake the payments sector.

www.smartcompany.com.au

 

[Doctore1003]

Interesting article in the AFR today.

Large lenders fear American Express will emerge as the big winner from the tougher payment fee caps being proposed by the Reserve Bank of Australia and are pushing for the US credit card giant to be regulated like Visa and Mastercard to keep the playing field level.

The RBA estimates Amex has about a 50 per cent market share of the corporate credit card market. When retail credit cards and debit cards are included Amex estimates its share of total card payments in Australia is less than 10 per cent and less than 2 per cent of all card transactions are processed on the American Express network.

The average merchant fees for American Express are 1.3 per cent of the cost of the goods, compared with debit cards at 0.4 per cent, and Visa and Mastercard credit cards at 0.8 per cent, according to the latest RBA data.

In a summary of the feedback it had received, released on Friday, the RBA said: “Many submissions stated that American Express would gain market share because they would be able to offer more benefits for consumers by virtue of not being subject to the RBA’s interchange regulations.”

The RBA said many submissions claimed American Express “would grow its share of the corporate card market significantly from an already dominant position, which could raise merchant payment costs”.

http://archive.today/nAtpA

 

[Waddygib]

I think more likely is merchants give Amex the heave given the pricing gap will open back up.

For business cards it will be positive for Amex, as so much of the spend now would be via the Payment Logics and Sniips of the world. But even that is on borrowed time once ATO cracks down on deducting the surcharge.......

 

[Mr_Orange]

The Queensland Government is flaunting the rules too with a 0.49% surcharge on EFTPOS savings selected with my debit card inserted. They even have signs up at each desk announcing they will be surcharging savings transactions.

What a load of pig swill!

 

[dajop]

When we stayed at a hotel in Perth earlier in the year they indicated the 1.5% surcharge applies to whatever method of electronic payment, including EFTPOS. So on the way back to hotel before checking out we noticed ATM and took out the cash to pay them, just on principle as the 1.5% isn’t a big deal but the principle is. . I guess this is the norm in Australian hotels, just that we don’t stay in them very often

I’m sure unlike a small family run takeaway (an an example) they do have some cash handling costs. And irritates me I’m particular with businesses like hotels and car hire companies whose business model is built around credit cards.

 

[Zero]

When we stayed at a hotel in Perth earlier in the year they indicated the 1.5% surcharge applies to whatever method of electronic payment, including EFTPOS. So on the way back to hotel before checking out we noticed ATM and took out the cash to pay them, just on principle as the 1.5% isn’t a big deal but the principle is. . I guess this is the norm in Australian hotels, just that we don’t stay in them very often

I'm not sure how Australian Hiltons get away with charging 2% fees and not accepting cash.

 

[LondonAussie]

Seems even the current rules aren’t being properly enforced. Perhaps there’s no penalty for companies that don’t comply?

Makes me a little worried the proposed ban also won’t be effective and these surcharges won’t completely disappear in Australia.

Not sure how the UK and EU and other countries are enforcing it, but I’ve never been surcharged anything anywhere on this side of the world for using a credit card.

Laughable now the RBA’s saying they need more time to figure out how to implement it. Other countries banned surcharges almost 10 years ago, maybe the RBA boffins can take a Euro trip and go see how it’s done.

 

[Mr_Orange]

Laughable now the RBA’s saying they need more time to figure out how to implement it. Other countries banned surcharges almost 10 years ago, maybe the RBA boffins can take a Euro trip and go see how it’s done.

In many respects, it really is a backwater downunder!

 

[Cruiser Elite]

In many respects, it really is a backwater downunder!

Spend a few days in China and so damned right - I cannot tap phone to pay Myki in VIC but i can scan Alipay to buy Subway tix in Shanghai - OMG seriously?

 

[Doctore1003]

In the AFR today: “RBA rethinks credit card surcharge ban, payment fee cut after stoush”

“While the ban on debit card surcharging is expected to remain, the RBA is now considering allowing surcharging to remain on some credit cards, according to a person familiar with the RBA’s thinking, who requested anonymity.

Rather than imposing a blanket ban on credit card surcharges, it could be that cards where surcharging remains are corporate credit cards and cards on which customers pay a higher annual fee to earn lucrative frequent flyer points. Such cards are more expensive for businesses to accept.

The regulator also revealed in the minutes that it was open to negotiation on the cap it wants to impose on interchange fees”

http://archive.today/LvLJM

 

[burmans]

Have got to say I expected this would end with a negotiation. I still think the bigger problem is actually enforcing it.

 

[LondonAussie]

Why is this so hard in Australia? Is it our big 4 banks having so much power?

Surcharge bans have been enforced with 100% compliance in the UK and EU, so why can’t we do the same in Australia?

 

[dairyfloss]

In the AFR today: “RBA rethinks credit card surcharge ban, payment fee cut after stoush”

“While the ban on debit card surcharging is expected to remain, the RBA is now considering allowing surcharging to remain on some credit cards, according to a person familiar with the RBA’s thinking, who requested anonymity.

Rather than imposing a blanket ban on credit card surcharges, it could be that cards where surcharging remains are corporate credit cards and cards on which customers pay a higher annual fee to earn lucrative frequent flyer points. Such cards are more expensive for businesses to accept.

The regulator also revealed in the minutes that it was open to negotiation on the cap it wants to impose on interchange fees”

http://archive.today/LvLJM

I’m good with this - the benefits I get for the card fees and cost of cc surcharges in Australia easily outweigh these sums. If you don’t want fees or surcharges, then go for the basic card product; provide options; don’t force everyone down the same path.

 

[am0985]

I’m good with this - the benefits I get for the card fees and cost of cc surcharges in Australia easily outweigh these sums. If you don’t want fees or surcharges, then go for the basic card product; provide options; don’t force everyone down the same path.

Exactly. The original plans were far too restrictive. There should be a way to preserve the benefits of premium cards whilst simplifying things for customers who don't use the benefits.

Indeed I'd be happier for an even higher cap on the premium cards so we can have benefits closer to the old days (or similar to the US). As it stands they've been whittled away over the years.

 

[Viridis]

Indeed I'd be happier for an even higher cap on the premium cards so we can have benefits closer to the old days (or similar to the US). As it stands they've been whittled away over the years.

I guess the question would be whether the providers that have ‘struck pre-emptively’ - I’m looking at you, Amex - would reinstate the the conditions that have been removed.

(As an aside, we were actually better off than the US with redemptions exceeding 1:1 if you had the Platinum (or Centurion) cards. That’s one of the things that annoys me with the proposed devaluation in December for Amex - the new values are less than 1:1. The US, Europe & the UK have demonstrated that even if the proposed RBA changes go through, 1:1 should be the baseline minimum.)

The FinRev article did make the point that part of the Amex changes are to focus on the local airlines. Not happy with that either - I have the Platinum because I want choice.

 

[levelnine]

I guess the question would be whether the providers that have ‘struck pre-emptively’ - I’m looking at you, Amex - would reinstate the the conditions that have been removed.

I don't see the AU Amex devaluation as a preemptive strike. It was a response to other conditions — weak AUD, which hits transfers to foreign airlines where they purchase points in USD; overly generous base earn rate as you say in the next paragraph; reduction in competitive landscape in Australia allowing them to extract more value from Australian customers.

If Amex gets caught up in this new version of the proposed reforms, which appears to be increasing in likelihood, I expect a further round of devaluations from Amex.

 

[am0985]

I don't see the AU Amex devaluation as a preemptive strike. It was a response to other conditions (worsening AUD, which hits transfers to foreign airlines where they purchase points in USD, overly generous base earn rate as you say in the next paragraph, reduction in competitive landscape in Australia allowing them to extract more value from Australian customers).

If Amex gets caught up in this new version of the proposed reforms, which appears to be increasing in likelihood, I expect a further round of devaluations from Amex.

AUD-USD has been trending in the same range for the last three years.

Sure it's less than historical levels but we haven't seen a sudden decline.

I doubt Amex can sustain another round of devals any time soon without getting lots of people ditching their cards.

 

[levelnine]

I doubt Amex can sustain another round of devals any time soon without getting lots of people ditching their cards.

And go where?

The Big Four will move first with a further devaluation once the interchange reduction kicks in. We'll probably see even more of them drop their international transfer partners as well.

Amex merely needs to stay one step above them.