On 15 July 2025, the Reserve Bank of Australia (RBA) issued a paper that sets out preliminary conclusions of the Payments System Board (PSB) following an earlier consultation process undertaken after the release of the Merchant Card Payment Costs and Surcharging Issues Paper in October 2024. The paper also includes for consultation certain draft standards that would implement the preliminary conclusions, using the powers granted to the RBA under the Payment Systems (Regulation) Act 1998 (PSRA).

Preliminary conclusions

The PSB has reached the preliminary conclusion that competition and efficiency in Australia’s payments system would be enhanced by:

  • Removing surcharging on all designated debit, prepaid and credit card systems.
  • Lowering wholesale card payment costs, particularly for small merchants, by lowering caps on domestic interchange fees and capping the interchange on foreign-card transactions.
  • Increasing the transparency of card payment costs to help payment service providers (PSPs) and merchants compare fees across the market and shop around for better-value payment deals.

As such, the RBA proposes to revoke its prohibition on ‘no-surcharge’ rules for each of the designated card systems. Based on historical experience and arrangements in other jurisdictions, the RBA considers that this would likely be followed by the designated card networks reimposing ‘no-surcharge’ rules.

The RBA notes that it is unlikely that it can directly impose an effective ban on surcharging by merchants, as merchants are generally not considered ‘participants’ in the designated card systems under the PSRA. If surcharging continues after the prohibition on ‘no-surcharge’ rules under the RBA’s standard was lifted – which would be counter to the spirit of the proposed policy reforms – the RBA notes that it could recommend that the Australian Government legislate a ban on the surcharging of cards of the designated card systems.

Variation to RBA standards

Appendix D to the paper outlines the draft variations to the following existing RBA standards to implement the preliminary conclusions described in the paper:

  • Standard No. 1 of 2016: The Setting of Interchange Fees in the Designated Credit Card Schemes and Net Payments to Issuers.
  • Standard No. 2 of 2016: The Setting of Interchange Fees in the Designated Debit and Prepaid Card Schemes and Net Payments to Issuers.
  • Standard No. 3 of 2016: Schemes Rules Relating to Merchant Pricing for Credit, Debit and Prepaid Card Transactions.

Next steps

The deadline for comments on the draft variations is 26 August 2025.

The RBA intends to publish conclusions and an implementation timeline for any regulatory steps by the end of the year.

Subject to certain transitional provisions it is proposed that the variations to the above RBA standards would come into effect on 1 July 2026. Appendix D of the paper contains further details regarding timing.