Card payment sucharges banned in Australia from 2026

[levelnine]

It is interesting that more people on this forum aren't upset by these changes.

It perhaps shows that there's a lot of people here who earn more by flying than by on the ground activities, that people are more dissatisfied with decreased award availability (which will become better as points earning on the ground is decimated) than decreased points earning, and people prefer surcharge-free transactions over award flights.

 

[SeatBackForward]

It is interesting that more people on this forum aren't upset by these changes.

It perhaps shows that there's a lot of people here who earn more by flying than by on the ground activities, that people are more dissatisfied with decreased award availability (which will become better as points earning on the ground is decimated) than decreased points earning, and people prefer surcharge-free transactions over award flights.

The whole Credit Card Points thing is a genius from the airlines perspective. They get extra revenue with only a marginal increase in needing to service airline customers. It's a pure financial/banking play. QF seem to take it up a level with the lofty promises of business class reward seating. They just don't admit that cheap reward seats are rare and never when anyone actually wants them. But the public buy into the whole "I'm getting points for free" so it's a win-win for the airlines. My approach is - well I have to fly anyway so earning these points is a by product of that. Same argument, but from a different perspective.

 

[SeaWolf]

It is interesting that more people on this forum aren't upset by these changes.

From my perspective I'm happy about the changes because it'll make things a lot less fiddly. When I'm presented with a card surcharge I'm basically being given a choice:

• Pay the surcharge and, in effect, pay for the points
• Pay surcharge free (usually cash, sometimes EFTPOS) and skip the points

So, if the surcharge is less than 1% the points are perhaps, possibly worth it, otherwise not. It means every transaction I'm having to choose which card to use, depending on if there's a surcharge and what it is.

I've ended up adding a HSBC debit card to my wallet because it give 2% cashback on tap-and-pay transactions under $100. That way I know for certain that I'm offsetting the surcharge and no worse off than if I'd paid in cash. I haven't encountered a surcharge above 2% yet but they've definitely been creeping up and getting closer and closer. With the points, the value is a bit more variable and ephemeral.

I guess from the RBA's perspective I'm the "model consumer". I have a range of payment methods in my wallet (AmEx, Mastercard Credit, Visa Debit and EFTPOS) and I'm aware of the differences and how to make sure a transaction goes through the right channel. I'm also making an assessment on each and every purchase to choose the most "efficient" payment route. Most of us on here would be similar.

But all of this is a pain. I've got to keep track of all these payment methods, decide each and every time, make sure I've got money available in all my accounts (sometimes I forget to top up the HSBC account and get a DECLINED). That's before you consider the annoyance of the whole mystery pricing aspect, never being quite sure how much you'll pay for that thing you picked up off the shelf or selected from the menu until the transaction goes through and not being quite sure if the merchant really is just passing on the charge or adding in a bit of an extra cut for themselves. One of the things that got highlighted in the RBA's paper was that the system has become a confusing mess for everyone, simplifying it all was one of the key reasons that RBA opted to eliminate all of the surchages, not just on debit cards.

So, to loop back to your original question about why people on the forum aren't more upset about this, while I'm not happy about the idea that rewards are (potentially) going to get slashed, I am happy that this mess is going to get untangled, that I won't have to do an assessment of the most "effecient" payment method for each transaction and that when I look at the sticker price for something I'll know that the price displayed will be the price I'll pay. Overall I think these changes are going to leave me better off, even if they don't help my points balance.

 

[burningrage]

To those wondering why people aren't more upset about RBA's proposal, I'd say this.

Allowing surcharging is the worst thing that RBA has had ever done. All it ever did was increasing cost of living while opening the floodgate for merchants (mainly hospitality & now Government joining the pack) to whack people the cost of running business.

If you think the Surcharging has allowed the expansion of the points system, you couldn't be any more mistaken. Credit card enshittification has been flourishing while I have seen merchants charging ridiculous 2% for an average 1.3% credit card surcharge costs.

So no, I am not upset by this. In fact, before surcharging happened, everyone was happy. You earned points, no enshittification, and no surcharging... until RBA decides they were wiser than Nostradamus!

 

[oz_mark]

To those wondering why people aren't more upset about RBA's proposal, I'd say this.

Allowing surcharging is the worst thing that RBA has had ever done. All it ever did was increasing cost of living while opening the floodgate for merchants (mainly hospitality & now Government joining the pack) to whack people the cost of running business.

If you think the Surcharging has allowed the expansion of the points system, you couldn't be any more mistaken. Credit card enshittification has been flourishing while I have seen merchants charging ridiculous 2% for an average 1.3% credit card surcharge costs.

So no, I am not upset by this. In fact, before surcharging happened, everyone was happy. You earned points, no enshittification, and no surcharging... until RBA decides they were wiser than Nostradamus!

Their ultimate goal was to push interchange rates down. Surcharging was viewed as a way of giving price signals to help push it down.
That was years ago, now cards are almost the default payment mechanism.

Even had they not gone down the surcharge path, they would have done something to reduce interchange fees. Points earning would have gone down anyway.

Remember, the RBA is interested in the efficiency of the payment system. They are not interested in your points.

 

[levelnine]

I've ended up adding a HSBC debit card to my wallet because it give 2% cashback on tap-and-pay transactions under $100. That way I know for certain that I'm offsetting the surcharge and no worse off than if I'd paid in cash. I haven't encountered a surcharge above 2% yet but they've definitely been creeping up and getting closer and closer. With the points, the value is a bit more variable and ephemeral.

Fair enough. Note this card will not survive the reforms. There's no way HSBC will be able to afford giving 2% back once interchange rates are crushed.

If you think the Surcharging has allowed the expansion of the points system, you couldn't be any more mistaken. Credit card enshittification has been flourishing while I have seen merchants charging ridiculous 2% for an average 1.3% credit card surcharge costs.

So no, I am not upset by this. In fact, before surcharging happened, everyone was happy. You earned points, no enshittification, and no surcharging... until RBA decides they were wiser than Nostradamus!

Just note that credit card point earning will not get better under these reforms. They will get significantly worse, mirroring what has occurred in Europe.

 

[flyguy77]

Fair enough. Note this card will not survive the reforms. There's no way HSBC will be able to afford giving 2% back once interchange rates are crushed.


Just note that credit card point earning will not get better under these reforms. They will get significantly worse, mirroring what has occurred in Europe.

Maybe people will be happy about the focus returning to 'frequent flying' rather than it all being about point collecting, smoke & mirrors marketing, credit card/pay.com advertising etc etc...

 

[SeaWolf]

Fair enough. Note this card will not survive the reforms. There's no way HSBC will be able to afford giving 2% back once interchange rates are crushed.

The only reason I've got it is because of the surcharges, so I know that if I pay with it I'm no worse off than if I'd paid cash instead. If the surcharges go I'll happily ditch it. I wouldn't recommend HSBC as a bank, they're kind of awkward to deal with and their online services are quite dated, but (as far as I know) they're the only Australian bank offering cashback at 2%, rather than points.

However, I'm not sure that the cashback will disappear. It's a debit card, so the interchange rates are already quite low on it and from looking at the RBA report they're looking to cap and lower the credit card rates, to bring them closer to the current debit card ones.

 

[burningrage]

Their ultimate goal was to push interchange rates down. Surcharging was viewed as a way of giving price signals to help push it down.
That was years ago, now cards are almost the default payment mechanism.

Even had they not gone down the surcharge path, they would have done something to reduce interchange fees. Points earning would have gone down anyway.

Remember, the RBA is interested in the efficiency of the payment system. They are not interested in your points.

Mayhap. However, we comparing reality vs ostensibility. The reality is, before Surcharging, nobody were screaming enshittification, no business were screaming high CC cost as they all accepted that's the cost of doing business, and most of all, everyone was peaceful.

Words like "Points earning would have gone down anyway" I think are at best, speculation and debatable, never to be proven by history because history would have recorded Surcharging DID happen and now we are in this mess. Remember, even before Responsible Lending kicked in, Australians have enjoyed point earnings and no surcharging for DECADES (at least since I came here in 90s).

Remember how merchants said, "Oh, if you allow surcharging, we won't increase the price of goods and services?". Yeah right. Look at those price of say, dining out. In early 2010s, in Victoria, it is possible to eat out with $7 for lunch. Today, average I think $15-$17. Oh, don't forget, 2% Credit Card Surcharge (Square), and oh, we now want to surcharge you on Saturdays (10%-15%) and Sundays (10%-20%) on top of Public Holiday. Today, they also trying to charge you "Service Fees" aka forced tips despite Australian AWOTE is far more favourable vs USA where workers rely on tips.

It is out of control and good riddance to see this surcharging goes.

 

[oz_mark]

Mayhap. However, we comparing reality vs ostensibility. The reality is, before Surcharging, nobody were screaming enshittification, no business were screaming high CC cost as they all accepted that's the cost of doing business, and most of all, everyone was peaceful.

Words like "Points earning would have gone down anyway" I think are at best, speculation and debatable, never to be proven by history because history would have recorded Surcharging DID happen and now we are in this mess. Remember, even before Responsible Lending kicked in, Australians have enjoyed point earnings and no surcharging for DECADES (at least since I came here in 90s).

Remember how merchants said, "Oh, if you allow surcharging, we won't increase the price of goods and services?". Yeah right. Look at those price of say, dining out. In early 2010s, in Victoria, it is possible to eat out with $7 for lunch. Today, average I think $15-$17. Oh, don't forget, 2% Credit Card Surcharge (Square), and oh, we now want to surcharge you on Saturdays (10%-15%) and Sundays (10%-20%) on top of Public Holiday. Today, they also trying to charge you "Service Fees" aka forced tips despite Australian AWOTE is far more favourable vs USA where workers rely on tips.

It is out of control and good riddance to see this surcharging goes.

You're getting hung up on surcharges, and weekend surcharges are a separate matter, and they won't go away.

The goal has been to reduce surcharges,

It's interesting to compare the situation to the UK, where there has been a class action over consumers paying excess prices as the retailers increased prices to everyone, not just credit card holders.

 

[burningrage]

You're getting hung up on surcharges, and weekend surcharges are a separate matter, and they won't go away.

The goal has been to reduce surcharges,

It's interesting to compare the situation to the UK, where there has been a class action over consumers paying excess prices as the retailers increased prices to everyone, not just credit card holders.

This is a start. Like everything, it needs to start somewhere. If we start to accept surcharging has been more of the pain than the gain (however late that be), then inevitably (or hopefully perhaps), it would flow onto other surcharging.

And I think there should be a whole of industry review, not just segmental like this. As an example, I think why we are seeing this now vs nothing at all in early 2010s was primarily driven by the drop in credit card users. This drop of numbers end up making banks focusing on earnings per customer rather than volume (and thus, spreading the burden. Less people = lesser pool of customers to spread the burden). But that's another story.

 

[Tiki]

I'm not too upset because the vast majority of my QF and VA come from Coles and Woolies. I do get some benefit from Amex Platinum Edge 3x but otherwise credit cards are not my big earner. At least not Aussie cards.

 

[Doctore1003]

Visa is mad that Amex, Google and Apple aren't covered by the surcharge ban.

Do the latter even add surcharges?

"the decision to continue allowing Amex, buy now, pay later providers, and Google and Apple to continue adding surcharges was a “bad outcome that risks creating and seeing a lot of volume move to those participants”.

I don't get it - can someone explain this to me?

https://www.theaustralian.com.au/business/financial-services/visa-australia-boss-slams-amex-google-and-apple-not-being-included-in-rba-card-surcharge-ban/news-story/9137bb1a5d11fc00c2ff10970be25658

https://archive.md/dk8wW

 

[Dr Ev]

Unpopular opinion on this site I’m sure, but honestly, good riddance to credit card points.
it’s just too much hassle getting premium seats now and it gets worse every year. I’d be glad to stop trying to chase points for ever diminishing returns.
Points are constantly being devalued.
In 2009-2012 I had a Westpac KrisFlyer Amex. I could pay unlimited amounts of tax for 3 KrisFlyer miles per dollar. And there was plenty of seat availability.
It’s not worth the bother now unless you push millions of dollars through a card for business expenses.

 

[badseed]

This is a good step for pricing transparency, and as noted above closes the surcharge loop that the RBA themselves ushered in. And yes it may impact credit card rewards earn in the short term but I'm certain that QFF, Velocity and Flybuys will all have a long list of ways to farm out points to meet their targets. Nature (and especially the QF board) abhors a vacuum.

 

[simmomelb]

Won’t surcharges just be incorporated into the advertised price? Which of course is how it should be. Every other business cost is included in the price.

Not sure I agree. If you are paying a retailer with a card that has zero fees why should the cost of transaction fees from other payment forms, from other customers, be included in the items/products/services you are buying?
I think stores like Aldi have it right. You have options to either pay the transaction fees or avoid them.
The same as paying airlines for airfares, they have options to avoid paying the transaction fees if your selected payment method avoids this, such as PayID/bank transfer.

 

[kpro]

I feel like we've already seen a de-valuation of credit card features since the last interchange fee change, including the interchange fee cap on 'ultra premium' cards that were being issued almost 10 years ago now.

This is not just points values that were halved for Visa/Mastercard. We've also seen a reduction in insurance coverage and most banks have gone from 55 to 44 days interest free.

Looks like USA has an average interchange fee of 1.8%. I haven't encountered any card surcharges over there, and their credit card product market is substantially better then ours.

 

[Kremmen]

One of the things that got highlighted in the RBA's paper was that the system has become a confusing mess for everyone, simplifying it all was one of the key reasons that RBA opted to eliminate all of the surchages, not just on debit cards.

Yes, it's taken 22 years for the RBA to admit that this utter stupidity that they inflicted upon us is a mess. Note that they originally claimed that market forces would mean that businesses would not rip us off with excessive surcharges, totally ignoring the fact that some businesses are effective monopolies which, of course, went on to do exactly that. The RBA then dicked about with the mess by creating limits on surcharge size, which are still not followed by some businesses anyhow, due to how hard it is for consumers to get it enforced.

Their ultimate goal was to push interchange rates down. Surcharging was viewed as a way of giving price signals to help push it down.
That was years ago, no cards are almost the default payment mechanism.

For many things, including travel, cards were almost the default payment mechanism back then too. Surcharging being viewed as a way to give price signals was just inane. Most people don't pull out thousands of dollars in cash to pay their hotel bill. Most of us didn't even back in the 80s.

 

[CaptJCool]

Old ways and new ways

Paying
Old way = cash with no surcharge and often a discount (cash can be hidden from the GST tax when not run through the till and there’s no charge to the business in acquiring it nor banking it)

New way = Credit card surcharge which has morphed into “whatever we think we can get away with over and above interchange fees and alleged costs of acceptance”

Billing
Old ways = paper letter surcharge of $2 or more (used to be free of cost but now usually $2)
New ways = email which is still free of cost

So plenty of hypocrisy

If you look at it as access costs and content costs,

wherever there is a gated access that’s where the fees are charged cause no-one pays for content (witness newspapers / TV channels / internet) moving from paper to digital cuts off the costs of access for the “news” and shifts the cost of access to the internet service providers and telcos

 

[NoName]

Not sure I agree. If you are paying a retailer with a card that has zero fees why should the cost of transaction fees from other payment forms, from other customers, be included in the items/products/services you are buying?
I think stores like Aldi have it right. You have options to either pay the transaction fees or avoid them.
The same as paying airlines for airfares, they have options to avoid paying the transaction fees if your selected payment method avoids this, such as PayID/bank transfer.

Your last two paragraphs about Aldi and airlines describe the current environment where surcharges are allowed. Aldi impose a surcharge for using a card. As do airlines. And actually, surcharges can be avoided everywhere you go by choosing a different payment method. That’s not what we are talking about here.

In a situation where surcharges are outlawed merchants will have the choice to either absorb the cost of accepting card payments or incorporate them in advertised price. The latter is what will happen.