A line off the receipt

On 1 October 2026 the card networks’ ban on surcharges took effect. In a joint release that day, the Treasurer, Jim Chalmers, with Daniel Mulino and Andrew Leigh, wrote: “Consumers will no longer pay around $1.6 billion in card surcharges when debit and credit surcharging ends today.” ¹ The evening before, at about 7:06 pm AEST, the Prime Minister, Anthony Albanese, posted on X that surcharges were “costing Australians $1.6 billion every year” and that “your morning coffee could be cheaper...” ²

The $1.6 billion is the estimate of the Reserve Bank of Australia, the RBA, of the card surcharges consumers paid in 2024/25 on the eftpos, Mastercard and Visa networks. ³ For shoppers at the businesses that surcharged, the RBA’s own summary says they “will pay similar amounts as they are paying now (just in a different form, via the sticker price rather than the surcharge)”. ⁴ The Governor, Michele Bullock, said two days before the ban began: “the cost of taking cards and cash will be built into the price. That’s the way it will work.” She added that lower merchant service fees “will partly offset the effect on merchants”. ⁵

The line came off the receipt. Did the cost go with it? Five questions follow: is $1.6 billion a saving, where do the card fees go, did prices rise, who bears the cost, and what do cash payers now pay. This account is as at 2 October 2026, the second day of the ban, and this outlet found no measured price data yet.

01What $1.6 billion counts

The RBA estimates that about 16 per cent of merchants surcharged designated-network payments in 2024/25. ³ The $1.6 billion is a model, not a count: the RBA scaled merchant-level surcharging data up to all designated personal cards, and the estimate “includes unexpected surcharges that obscure the total amount consumers are paying”, a point for the ban. ³⁶

The “save” framing comes from ministers. The Treasurer’s release of 31 March 2026 opened: “Australians will no longer pay $1.6 billion a year in surcharges and small businesses will save $910 million”, and said the changes would “save consumers and businesses money”. ⁷ Reuters reported that the government said the change would save Australians A$1.6 billion a year in fees, and SmartCompany reported the Prime Minister on Facebook promising “saving you money every time you tap”. ⁸⁹

The RBA’s own 31 March media release contains no dollar figure at all. ¹⁰ The RBA did once frame a saving itself: in July 2025 its preliminary estimates were that consumers “would pay around $1.2 billion less in surcharges per year”, though the same draft said “some of the consumer benefits from the reduction in surcharges would be offset by higher prices charged by merchants”. ¹¹¹² Asked on 29 September whether the ban would deliver “meaningful relief for households facing cost of living pressures”, the Governor did not claim a saving. ⁵

In the documents this outlet read, neither the RBA nor the Treasurer publishes an estimate of what consumers save once prices adjust.

02Who did the banning

Strictly, it is the card networks’ rules that ban surcharges. The RBA’s Payments System Board decided to “remove surcharging by lifting the prohibition on ‘no-surcharge’ rules for all designated card networks”, and eftpos, Mastercard and Visa “each decided to introduce ‘no-surcharge’ rules from 1 October 2026”. ⁶¹³ The legal change is a Reserve Bank instrument that commenced on 1 October and repeals the clauses which had stopped card scheme rules from prohibiting surcharging up to the cost of acceptance. ¹⁴

Enforcement sits with the networks. “The card networks are ultimately responsible for ensuring compliance with these rules, not the RBA,” the RBA says, and the Australian Competition and Consumer Commission says of itself: “The card networks or payment service providers are responsible for enforcing these rules, not the ACCC.” ¹³¹⁵

American Express and UnionPay withdrew from their RBA undertakings on 1 October and have decided to remove surcharging, and PayPal’s no-surcharge rule starts on 5 October. The RBA says these firms “are not currently subject to formal regulation by the RBA”, and that network rules “may be subject to change”. ¹³¹⁶¹⁷

No legislated ban has been announced in the sources this outlet checked; the RBA says that if surcharging continues it “could recommend that the Government legislate a ban on surcharging”. ⁶ The only dated government pledge this outlet found is conditional and about debit: on 15 October 2024 the Prime Minister, the Treasurer and the Assistant Treasurer said they were “prepared to ban debit card surcharging from 1 January 2026, subject to the consultation undertaken by the RBA”. ¹⁸ What arrived took effect nine months later and covers credit as well. ¹¹⁰

03Where the fees go

A merchant’s cost of taking cards has three parts: interchange fees, scheme fees and an acquirer or payment service provider margin. ¹⁹ In 2023/24 interchange was about 65 per cent of merchant service fees on domestic credit cards but about 30 per cent on domestic debit. ¹² Merchant service fees are around $7 billion a year, the RBA says, excluding costs such as terminal rental. ²⁰³

What fell on 1 October was the interchange cap: on domestic consumer credit cards from 0.8 to 0.3 per cent, and on debit and prepaid cards from 10 cents or 0.2 per cent to 8 cents for a fixed fee or 0.16 per cent for a percentage fee. ²¹²² Scheme fees are not capped: acquirers paid $992.1 million in net scheme fees on domestic-issued cards in 2024/25, around one-sixth of merchants’ domestic card costs. ²³

The Treasurer’s 31 March opening line gave the $910 million to “small businesses”, yet the body of the same release says “Lower fees for businesses”, and the RBA attaches the figure to merchants generally. ⁷⁶ The RBA also estimates that domestic issuers’ interchange revenue falls by about $660 million a year, assuming no other changes in behaviour; AAP reported on 1 October that the new cap “will deliver around $660 million a year in lower payment costs for businesses”. ²²²⁴

Issuers told the RBA they could cut rewards points, shorten interest-free periods or raise credit card interest rates, and the RBA says issuers, not merchants, should bear the cost of rewards. ²²²¹ ANZ raised the purchase rate on its First, Frequent Flyer and Rewards cards to 22.49 per cent a year as of 28 September 2026, and from 28 October lifts its cash advance fee from 3 to 3.5 per cent and caps points; its card-changes page does not mention the RBA or interchange. ²⁵ THE AIRLINE RORT’s ‘The frequent flyer financial machine’ follows how rewards points are sold to banks and retailers, and THE INFLATION RORT’s ‘The savers’ share’ sets what banks pay savers beside what they charge borrowers, on the RBA’s own tables.

Visa’s schedules point to an offset the RBA anticipated: from 1 October one domestic consumer credit rate of 0.30 per cent, where its June schedule had a 0.20 per cent standard rate (Visa defines standard consumer products as Classic and Gold), while premium rates fell to 0.30 per cent. ²⁶²⁷²² These are headline schedules only and do not show what any merchant pays.

As read on 2 October, some pass-through has happened: CommBank cut the merchant service fee on its single-rate plans from 1.10 to 0.99 per cent, Westpac cut its flat rate for eligible EFTPOS terminal and PayWay customers from 1.20 to 0.79 per cent, and Stripe cut its online domestic rate from 1.7 to 1.65 per cent, while Square’s in-person rate stayed at 1.6 per cent and Zeller advertises 1.4 per cent in person. ^282930313233 About three-quarters of merchants are on single-rate or blended plans, where pass-through overseas was generally lowest, and the first public pass-through data is due by 30 January 2027. ²⁰¹³

Accountant Todd Hodkinson told Accountants Daily that he suspects there may be more pricing of the kind “$101.50 for card payments or $100 for cash”, and added: ³⁴

04Did prices rise?

The RBA’s Payments System Board “anticipates that the 16 per cent of merchants that currently surcharge may increase their advertised prices to cover the cost of accepting card payments”. ⁶ It also says shopping at those merchants “should not result in a material change in the total price paid by consumers”; its word “negligible” covers only the inflationary effect of merchants rounding prices up. ²²

The reports so far are single businesses, not a sample. Reuters quoted Rusty Rabbit Cafe owner Peter Semaan saying he raised food and cold drink prices by about A$2 on average, and Sydney bar owner Dre Walters saying “100% this will be passed on.” ⁸ Bloomberg reported that Ross Surace, of Lennox Street Deli in Moonee Ponds, was preparing to add 50 cents to a coffee. ³⁵ The ABC reported that salon owner Sheridan Shaw “has been forced to increase her pricing” and that restaurant owner Peter Papas “has increased his prices”. ³⁶

Against those, a poll of a MYOB webinar audience found only one in five small businesses had decided to adjust prices, 7 per cent had chosen to absorb the cost and 29 per cent were unsure; the audience was self-selected, with 62 per cent of respondents surcharging most card payments, against 16 per cent of merchants nationally. ³⁷

The ACCC’s worked example is a $60 haircut with a 1.0 per cent surcharge, which would become $60.60 if card costs were built into the price; a salon that moved to $65 because of energy and labour costs “must not tell consumers that the price increase is due to the changes to card payment surcharging”. ³⁸ No measured data exist yet. The ABS releases the October 2026 Consumer Price Index, the first month under the ban, on 25 November, and warns that release dates may change. ³⁹ The Governor made her remarks at the 29 September media conference on the rise in the cash rate to 4.60 per cent, which THE INFLATION RORT’s ‘Four rises in 2026’ sets out. ⁵

05Who eats the cost

For those merchants nothing is new on the receipt. For the 16 per cent that surcharged, someone must now carry the cost the surcharge used to cover. Not every business eats it: some absorb it, some raise prices and some move it into other lawful fees, and as at 2 October 2026 no source has measured the split; in MYOB’s self-selected poll, 7 per cent had chosen to absorb it. ³⁷ ACCI’s chief executive, Andrew McKellar, told the ABC: “Some small businesses are going to have to absorb those costs, and in some cases, it’s just going be passed through still to consumers.” ³⁶ COSBOA’s chief executive, Skye Cappuccio, said on 17 September: “For a small business, there is no such thing as a cost that simply disappears.” ⁴⁰

Some sellers cannot simply reprice. The RBA refused exemptions to merchants with regulated prices, such as pharmacies and lottery agencies, and says it is informing governments and price regulators “so that price regulators can take this change into account in their future decisions”. ⁴¹ Central Coast councillor Jared Wright estimates the ban will cost the council about $400,000 in lost fees and says raising fees is a “multi-month process”; these are a councillor’s estimates, not council documents. ⁴²

Other fees sit outside the change: the RBA says it does “not apply to weekend surcharges, public holiday surcharges, or booking fees or service fees”. ¹³ A Sydney cafe owner, David Bitton, told SBS he would lift his weekend surcharge from 10 to 12 per cent rather than raise menu prices, and the ACCC told SBS it is “aware of concerns about businesses introducing fees described as platform, booking or service fees”, but said such fees are not necessarily prohibited. ⁴³

06The cash payer’s share

No rule imposes a new fee on cash. What follows is analysis, not an RBA finding. At a shop that surcharged, a cash payer used to escape the card cost; if the shop raises its sticker price, the cash payer now pays that rise with everyone else. At the rest, the card cost was already in the price. Stakeholders warned the RBA of this in the consultation, arguing that removing surcharging would “Increase costs for cash users if the price of goods and services increases for all consumers regardless of how they pay”. ⁴⁴

The RBA’s head of payments policy, Ellis Connolly, told the ABC: “the consumer was paying it either way, whether it was paid in a surcharge or whether it was paid in the end price.” ⁴² The ABC quoted restaurant owner Peter Papas saying a customer who pays cash is “now subsidising credit card infrastructure providers, because everyone has adjusted their menu”. ³⁶

The remedy on offer is a cash discount. The RBA says businesses can continue to offer discounts for particular payment methods, and the ACCC says the price displayed must be the full price, with the discounted price not made more prominent. ¹³³⁸

The RBA also states: “Recent studies suggest that cash is no longer clearly cheaper for merchants to accept”. ⁶ Where the Conclusions Paper footnotes that claim, in footnotes 14, 21 and 24, the only source it cites is Mastercard’s submission of 15 January 2025. ³ This outlet has not read that 15 January 2025 submission, and the RBA may rely on other studies.

Cash is still used: in 2025 about 15 per cent of payments by number and 8 per cent by value, and high cash users, around 7 per cent of respondents, are “somewhat more likely to be older and have lower household incomes”. ⁴⁵

The surcharge came off the receipt. The cost of taking the card stayed in the price.

No source measures what cash payers have paid since 1 October. The RBA’s 0.1 per cent figure is an aggregate across all payers, not a cash-payer figure.

07The case for the ban

The case for the ban is real, and the RBA makes it well. The RBA’s consumer survey found 76 per cent of consumers want surcharging to stop, and only 13 per cent are always told about surcharges when they shop. ⁴⁶ The RBA’s media release says removing surcharging “aligns with the preference of most consumers for payment costs to be incorporated into advertised prices”. ¹⁰ The $1.6 billion includes surcharges consumers could not see coming. ⁶

The RBA says the old framework was undermined by single-rate payment plans, the difficulty of enforcing the rules and declining cash use, and that surcharging has doubled in prevalence since 2022. ⁶ Its analysis found surcharging made minimal difference to merchants’ costs: a merchant taking $1 million in card payments would save an estimated $36 from surcharging. ⁴¹

Lower credit interchange narrows the average gap between consumer debit and credit cards from 0.4 to around 0.25 percentage points, so debit users cross-subsidise credit card rewards less. ²² The RBA’s media release says small businesses “should benefit the most” because they tend to pay fees closer to the existing caps. ¹⁰

Economist John Hawkins, quoted by the ABC, said of the cost of providing cash payments: “One way or another people are going to have to pay for it and it’s proper that they should.” ⁴⁷ In its response to the RBA’s 2025 consultation paper, Mastercard said that “surcharging is antiquated and that a ban is required”, and the ABA said that banks “strongly support” the ban. ⁴⁸⁴⁹

08What we do not know yet

The documents this outlet read contain no official estimate of a net saving to consumers, no source has measured how the cost splits between businesses and shoppers, and no measured price data exist; the October CPI is due on 25 November. Fee data from the networks and large acquirers is due by 30 October and pass-through data by 30 January 2027, and this outlet found no list of which acquirers count as “large”. ¹³ Mastercard’s interchange schedule could not be read, and the post-1 October Australian rule text of the networks has not been located. No penalty amount for a merchant that keeps surcharging exists in any public source this outlet found. Reuters is cited from syndicated wire copy, because reuters.com could not be read, and the ACCC’s pages show no publication date, so they are cited as at 2 October 2026; one of them was modified at 8:50 am AEST that day.

Right-of-reply questions to the RBA, the Treasurer’s office, Visa, Mastercard, Australian Payments Plus, the ACCC and the Australian Banking Association had not been sent when this article was published; any answers will be added as dated updates.

09Off the receipt, into the price

The line came off the receipt, and the RBA expects the cost to show up in the price at the shops that surcharged. ⁴⁵ The real, conditional gain is the $910 million cut in merchants’ wholesale costs, which in this outlet’s reading has to be passed on twice, from acquirer to merchant and from merchant to shopper. ⁶ This case will test it on 30 October, 25 November and 30 January 2027.

$1.6 billion is a bill Australians already paid. In the documents we read, no one has estimated what they will save.

Article 2 turns to a payee that took a different course. The Australian Taxation Office announced on 1 October that it will stop accepting credit cards after 30 November 2026, saying “it would not be appropriate for the cost of credit card merchant fees to be transferred to the community.” ⁵⁰

If it’s a rort, we cover it.