The RBA plans to conclude consultations with industry stakeholders by the end of 2025 and will publish its final decisions and implementation timeline later this year.

The proposed reforms include measures to lower interchange fees and improve transparency around the costs charged to businesses, which could particularly benefit small merchants.

The new regulations will require credit card networks to disclose their fees, fostering competition and potentially reducing costs for merchants.

RBA Governor Michele Bullock emphasized that these reforms are necessary to ensure Australia's payment system remains safe, competitive, and efficient amid an evolving landscape.

Around 90% of Australian businesses are expected to benefit from these changes, especially smaller ones that currently face higher fees relative to their size.

The Reserve Bank of Australia (RBA) has proposed a comprehensive ban on surcharges for credit and debit card transactions, set to take effect by July 2026, aiming to save consumers approximately $1.2 billion annually.

This new proposal extends beyond previous plans that targeted only debit card surcharges, responding to industry feedback that a blanket ban would be simpler to implement.

The decline in cash usage, from 70% in 2007 to just 13% in 2022, has made surcharges less effective in guiding consumer payment choices, prompting the need for reform.

Currently, only about 10% of businesses impose surcharges, mostly cafes, restaurants, and pubs, with average surcharges around 0.7% of a transaction, often exceeding actual processing costs.

The reforms could lead to increased prices in sectors like hospitality, as businesses absorb the costs previously covered by surcharges, which may contribute to a slight inflation increase of around 0.1%.

Despite the ban, businesses will still be allowed to offer cash discounts, maintaining some flexibility in payment options.

Public feedback on the proposal is open until August 26, and the RBA will announce its final decisions and a detailed implementation plan by the end of 2025.

Industry groups like the Australian Restaurant and Cafe Association have expressed concerns, warning that the changes could lead to higher menu prices in the hospitality sector.