The Reserve Bank of Australia (RBA) is proposing to eliminate surcharges on card payments, which would benefit consumers and promote innovation in payment systems.

As cash usage declines, the costs associated with traditional payment processing are rising, especially with Bitcoin's recent surge highlighting ongoing issues in the payment ecosystem.

The use of cash in Australia is decreasing rapidly, projected to account for just 4% of transactions by the end of the decade, raising questions about the future of cash infrastructure.

Currently, EFTPOS remains the most affordable payment method for merchants, with costs lower than credit card options like Visa and Mastercard.

Small businesses often face higher processing fees compared to larger merchants, which can lead to increased costs for consumers.

In its review, the RBA suggests capping interchange fees, mandating least-cost routing, and requiring clearer disclosure of fees charged to merchants to improve transparency.

The RBA recognizes the importance of cash for vulnerable communities and emphasizes the need for a transparent, efficient payment system as society moves toward a cashless economy.

Data shows that while small businesses pay an average fee of 1.6% per transaction, the actual interchange fee is significantly lower, indicating a substantial markup.

The Council of Small Business Organisations Australia argues that removing surcharges will not eliminate fees but will instead embed them into overall prices for goods and services.

Although blockchain technology was once touted as a solution for payment processing issues, the RBA's proposed reforms may prove more effective in reducing costs and enhancing transparency.