Card payment sucharges banned in Australia from 2026

[Doctore1003]

If only “premium” FF cards have a surcharge, you can probably expect it to be so high as to cancel out the value of the points.

 

[Chicken]

What is it that you are doing?

If you see a Tyro or Westpac terminal, when you are given the terminal to pay, look at the screen, there is a touch screen button called 'surcharge info'. You press that on the screen, and it would show you like

EFTPOS 0%
EFTPOS tap 0%
Visa debit 0.4%
MC debit 0.4%
Visa credit 0.8%
MC credit 0.7%
JCB 2.5%
AmEx 1.9%

and so on and so on.

That's how I decide which card I will be using.

 

[levelnine]

I don't think either of these things are true.

I haven't heard any latest rumours about them being directly affected? Feel free to point me to them if I'm wrong but these changes were always about the banks. The RBA doesn't even have the same jurisdiction over Amex AFAIK.

The rumours as they are would have affected Amex. Not directly but indirectly. If interchange fees were drastically lowered for other cards and Amex kept their fees stagnant, we would've gone back to seeing Visa/MC being accepted by merchants in significant preference to Amex.

Both are true:

The regulator also confirmed in that meeting that it was considering using new powers to allow it to regulate Apple, American Express and buy now, pay later providers, flagging a public consultation mid next year. ...

The reference to a higher rate for corporate credit cards is a response to warnings from banks that a reduction in the interchange fee caps as initially proposed would threaten their commercial viability, while allowing financial institutions such as American Express, which is not captured by the RBA’s proposed reforms, to win more market share. ...

https://archive.md/LvLJM

 

[MELso]

I don't think either of these things are true.

I haven't heard any latest rumours about them being directly affected? Feel free to point me to them if I'm wrong but these changes were always about the banks. The RBA doesn't even have the same jurisdiction over Amex AFAIK.

The rumours as they are would have affected Amex. Not directly but indirectly. If interchange fees were drastically lowered for other cards and Amex kept their fees stagnant, we would've gone back to seeing Visa/MC being accepted by merchants in significant preference to Amex.

The Treasury Laws Amendment (Payments System Modernisation) Act 2025 passed Parliament a couple of months ago, and extended RBA powers to Amex, BNPL and other payment systems.

(Of course, in the typical style of modern Australian regulation, the RBA looks let to cave at the slightest hint of whingeing by industry. Sigh...)

 

[Waddygib]

But even so, what can they do to amex? There is no interchange they can regulate. They can't cap merchant fees. They can allow Amex to enforce "no-surcharge" on its merchants, but does Amex actually want to?

I may be missing something but what can RBA do the them?

 

[am0985]

Both are true:

https://archive.md/LvLJM

As others have pointed out Amex doesn't have interchange. Regulation of Amex is bundled in with BNPL systems which also don't have interchange fees. So it's still unclear how RBA could regulate this other than banning surcharges.

Also as per the second point, Amex could potentially get more market share but if Visa/MC interchange fees were capped they'd need to drop their merchant fees in order to ensure some retailers don't go back to only accepting Visa/MC again.

 

[MELso]

But even so, what can they do to amex? There is no interchange they can regulate. They can't cap merchant fees. They can allow Amex to enforce "no-surcharge" on its merchants, but does Amex actually want to?

I may be missing something but what can RBA do the them?

Not sure how familiar you are with the Payment System (Regulation) Act 1998 but it gives the RBA sweeping powers to make standards for payment systems (including capping fees).

 

[Waddygib]

Right but even then I thought they can only regulate the pricing between parts of the payment system; the final rate to the merchant is outside of that isn't it?

So Amex's rate to (say) my local cafe is a contract between the cafe and Amex. Not sure the RBA can intervene there, can they?

They can allow Amex to require the cafe not to surcharge (but currently they don't allow that).

 

[MELso]

Right but even then I thought they can only regulate the pricing between parts of the payment system; the final rate to the merchant is outside of that isn't it?

So Amex's rate to (say) my local cafe is a contract between the cafe and Amex. Not sure the RBA can intervene there, can they?

They can allow Amex to require the cafe not to surcharge (but currently they don't allow that).

No - as I said, the powers are sweeping, and cover fees charged to end users.

 

[Waddygib]

I'm not sure your right, but happy to be corrected. I don't think they can set the final discount rate, only the components between payment system participants (eg the price between Nab and Visa, the price between Visa and Tyro, but not the price between Tyro and the cafe).

 

[MELso]

I'm not sure your right, but happy to be corrected. I don't think they can set the final discount rate, only the components between payment system participants (eg the price between Nab and Visa, the price between Visa and Tyro, but not the price between Tyro and the cafe).

Credit and debit card interchange fees between acquirers (like Tyro or merchants) and issuers (Visa and Mastercard) are directly capped at between 20 and 80 basis points (which has the practical effect of limiting the fees payment providers like Tyro charge end users), while merchants are limited to charging a surcharge that does not exceed the 'cost of acceptance'. See the standards here.

(They could if they wanted to cap the prices that Tyro charged end users too, but haven't done so.)

 

[LondonAussie]

merchants are limited to charging a surcharge that does not exceed the 'cost of acceptance'.

and we’ve all seen how well that’s enforced…

Unless some can also include the cost of the terminal and POS system, the electricity that runs it, the software to calculate the surcharges, etc.

 

[MELso]

and we’ve all seen how well that’s enforced…

Unless some can also include the cost of the terminal and POS system, the electricity that runs it, the software to calculate the surcharges, etc.

Yup - it's (another) good reason for just banning surcharges. There are also rules around transparency (i.e. disclosure of surcharges) enforced by the ACCC that seem to be more honoured in the breach than the observance.

Just ban them!

 

[levelnine]

As others have pointed out Amex doesn't have interchange. Regulation of Amex is bundled in with BNPL systems which also don't have interchange fees. So it's still unclear how RBA could regulate this other than banning surcharges.

Also as per the second point, Amex could potentially get more market share but if Visa/MC interchange fees were capped they'd need to drop their merchant fees in order to ensure some retailers don't go back to only accepting Visa/MC again.

I'm not sure your right, but happy to be corrected. I don't think they can set the final discount rate, only the components between payment system participants (eg the price between Nab and Visa, the price between Visa and Tyro, but not the price between Tyro and the cafe).

The RBA can regulate any aspect of Amex's payment business through the setting of standards it must follow. That is very clear from s 18(1) of the Payment Systems (Regulation) Act 1998.

 

[MELso]

The RBA can regulate any aspect of Amex's payment business through the setting of standards it must follow. That is very clear from s 18(1) of the Payment Systems (Regulation) Act 1998.

Or Tyro's for that matter.

 

[Waddygib]

Or Tyro's for that matter.

s 18A(1) relates to interchange, not the end price to the merchant.

s 18(1) is about the payment systems themselves. They can regulate the rules of the schemes and the ways in which the participants behave amongst each other but placing a price cap on merchant fees would (I'm fairly confident) be over-reach. Otherwise why would they faff around with interchange pricing at all, if they can just cap the end price and let the paricipants sort out the details?