The RBA is Coming for Your Points

The Reserve Bank of Australia (RBA) plans to ban card payment surcharges and reduce interchange fees in Australia from 1 July 2026.

While many of the proposed changes are positive for consumers, there will almost certainly be an impact on credit card reward points, fees and benefits once the changes come into effect. Australian banks will likely respond by reducing the amount of points you can earn through credit cards even further than they already have.

What the RBA is proposing

The RBA released its Review of Merchant Card Payment Costs and Surcharging consultation paper on 15 July 2025. This 137-page document outlines several proposed reforms that the RBA is looking at introducing next year.

Many Australian frequent flyers will welcome the ban on debit and credit card surcharges. Many of the other proposals are also, frankly, quite positive.

However, if you like collecting points with your credit card, the proposed reduction in interchange fees is a cause for concern. These are the fees that merchants pay to card providers for processing transactions. (This backgrounder on the RBA website explains in lots more detail how this all works.)

You can read about the five different policy options that the RBA is considering in relation to interchange fees on page 28 of the consultation paper.

One policy option is to reduce the interchange fee cap from the current 0.8% to 0.5% of the transaction value. Another option being considered is to reduce it to 0.3%.

The RBA is also considering whether to only apply this reduced cap to transactions on personal credit cards. In that case, business and corporate credit card transactions would still be subject to the current 0.8% interchange fee limit.

In its paper, the RBA lists a range of arguments against reducing interchange fees. This is one of them:

The benefits of card payment services to end users may decline; specifically, issuers could charge higher card fees or reduce the value of card benefits or rewards programs, and acquirers could capture the savings from lower interchange fees by increasing their margins.

What impact would this have on credit card rewards?

Banks largely use the margins that they make from interchange fees to fund the reward points that they issue to cardholders for spending money on their cards.

If banks are forced to collect lower fees on card payments, you can be sure they will look to offset this by reducing the number of points they give out per dollar spent on points-earning credit cards.

Other possible impacts could include:

• New and lower caps on the amount of points you can earn on card payments at the full rate each month
• Higher annual fees
• Reductions in other credit card benefits

American Express would not be directly impacted by these changes, as the RBA does not regulate American Express. However, American Express is likely to adapt to the changing market conditions and could follow suit voluntarily.

The RBA says on page 36 of the paper that if Visa and Mastercard are forced to drop their interchange fees…

Acquirers that offer simple merchant plans that include American Express in the same flat fee charged for debit and credit card transactions may exert pressure on American Express to lower the wholesale fees it charges those acquirers in line with those charged by four-party networks if American Express wants to remain included in those plans.

And:

Some merchants may be able to constrain the ability of American Express to raise its prices by threatening or choosing not to accept American Express altogether; unlike Visa and Mastercard, American Express is not a ‘must-take’ card for many merchants.

The RBA changes of July 2017

The RBA last made changes to interchange fee regulations in July 2017, introducing lower caps. Predictably, this led to pretty much every bank in Australia reducing the amount of reward points they gave on card payments. American Express eventually followed in April 2019.

The RBA changes of 2017 were also the catalyst for many banks to start introducing monthly or annual caps on the total amount of points cardholders could earn on their credit card transactions.

With the RBA now proposing to reduce interchange fees even further, it wouldn’t be surprising if we saw similar changes in the Australian credit card market in July 2026.

The UK as a case study

The new interchange fees that the RBA is proposing are quite similar to what currently exist in the United Kingdom.

The UK market does have plenty of credit cards available, but the number of points you can earn – particularly from sign-up bonuses – is substantially lower. That’s not surprising as the banks make smaller margins on interchange fees, and therefore have less money to pay airlines for frequent flyer points.

Have your say

The RBA is accepting written submissions on from interested stakeholders on the issues raised in its consultation paper until 26 August 2025. You can email your feedback to [email protected], with submissions attached to the email as a Word document. See chapter 9 of the paper (from page 73) for more details about submitting feedback.

There’s also lots of discussion about this on the Australian Frequent Flyer forum:

Matt Graham

The editor of Australian Frequent Flyer, Matt's passion for travel has taken him to more than 100 countries… with the help of frequent flyer points, of course!
Matt's favourite destinations (so far) are Germany, Brazil, Kazakhstan and Uzbekistan. His interests include aviation, economics & foreign languages, and he has a soft spot for good food and red wine.

You can connect with Matt by posting on the Australian Frequent Flyer community forum and tagging @AFF Editor.