The reform aims to remove surcharges across eftpos, Mastercard, and Visa networks, so sticker prices reflect the true cost at checkout.

Critics say the reform benefits Visa, Mastercard, and card-issuing banks, while others warn it could have inflationary effects on consumer prices.

The changes are expected to lower card payment costs for businesses, especially small businesses, though some may raise sticker prices to cover costs.

Interchange caps for domestic consumer credit card transactions will be cut from 0.8% to 0.3%, with measures to prevent providers from pocketing extra savings, saving businesses an estimated 910 million AUD.

The Reserve Bank of Australia will ban consumer surcharges on debit and credit card payments from October 1, as part of reforms to the retail payment system, preventing card issuers and networks from adding extra fees.

The reforms prohibit targeted loyalty- or frequent-flyer-based surcharges, and require a shift away from such pricing incentives.

Some card networks have separate agreements with the RBA and are not covered by the rule changes.

To deter merchants from passing costs to consumers, the RBA will strengthen oversight of card-issuing and payment-processor arrangements and push for greater transparency, including higher price transparency for small businesses.

The RBA will require networks like eftpos, Mastercard, and Visa to publish the fees they charge to aid business price comparisons.

American Express will not be subjected to the same surcharging ban this time due to its card-issuing model and how it processes transactions.

Interchange changes for foreign cards are scheduled to begin on April 1, 2027.

Federal Treasurer welcomed the reforms as relief for small businesses and consumers from confusing surcharges and inflationary pressure.