RBA releases card payment costs, surcharging consultation paper

RBA releases card payment costs, surcharging consultation paper

The Reserve Bank of Australia (RBA) has released a Consultation Paper as part of its Review of Merchant Card Payment Costs and Surcharging. The paper, released on July 2, 2025, follows an extensive public consultation process that began with the release of an Issues Paper in October 2024. The Payments System Board has reached a preliminary view that it would be in the public interest to remove surcharging on eftpos, Mastercard, and Visa cards [1].

Currently, consumers pay around $1.2 billion in card surcharges annually. Surcharging is no longer effective in steering consumers to make more efficient payment choices, as cash usage has declined and businesses increasingly charge the same surcharge rate across debit and credit cards. The proposed removal of surcharging would simplify card payments, enhance transparency, and foster competition in the card payments system [1].

Additionally, the RBA proposes to lower the cap on interchange fees paid by businesses, which could save businesses around $1.2 billion annually. Around 90% of Australian businesses are expected to benefit from this proposal, with small businesses being the most significant beneficiaries. Introducing caps on foreign interchange fees would also help to reduce fees for all businesses accepting international cards [1].

The RBA also aims to require card networks and large acquirers to publish the fees they charge. This move is intended to improve transparency and competition, helping all players better understand the fees they are charged and enabling businesses to shop around for better deals [1].

The consultation period for the proposed policy options and draft standards will run until August 26, 2025. The RBA will draw on this feedback to finalize reforms that are in the public interest, aligning with its objectives of a safe, competitive, and efficient payments system. The RBA intends to publish the conclusions and an implementation timeline for any regulatory steps by the end of the year [1].

Separately, the RBA has launched Project Acacia, a project to test the use of a wholesale central bank digital currency (CBDC). The initiative, which will run for six months, will involve 19 pilot cases and five proof-of-concept use cases. The trials will explore the use of CBDCs in various asset classes and settlement methods, including central bank digital currencies, stablecoins, and bank deposit tokens. The project aims to assess how digital money and payment systems might improve the function of wholesale financial markets in Australia [2].

References:
[1] https://www.rba.gov.au/media-releases/2025/mr-25-19.html
[2] https://profit.pakistantoday.com.pk/2025/07/10/reserve-bank-of-australia-launches-project-to-test-digital-currency-use/