In July 2025, the Reserve Bank of Australia (RBA) proposed a sweeping reform of Australia’s payments system: a complete ban on all surcharges for eftpos, Mastercard, and Visa debit and credit card transactions. If implemented, this reform could save Australian consumers approximately $1.2 billion annually and would significantly lower interchange fees—including those charged on foreign-issued cards.
For finance leaders and bookkeepers, this represents a fundamental change in how transaction costs are passed on to customers and how businesses manage payment processing expenses.
In this article, we break down what this proposal means, why it’s happening, what businesses should consider, and how tools like Budgetly can help maintain financial clarity as payment systems evolve.
- What has the RBA proposed?
- When would the surcharge ban take effect?
- Why is the RBA making this change?
- How does this affect Australian businesses?
- Benefits of the surcharge ban for businesses
- Risks and considerations for finance teams
- How Budgetly can help maintain expense visibility
- Looking ahead: Preparing for payment reform
What has the RBA proposed?
The RBA’s proposal includes several key changes:
- A total ban on merchant surcharges for debit and credit transactions made via eftpos, Mastercard, and Visa networks.
- A requirement for banks and payment networks to publish currently hidden fees, improving transparency.
- A reduction in interchange fees paid by businesses on card transactions, including fees from overseas-issued cards.
The proposal goes beyond previous government plans, which targeted only debit card surcharges, by applying uniformly across all card types.
When would the surcharge ban take effect?
The RBA is currently consulting on this proposal until 26 August 2025, with final recommendations expected by the end of the year. If adopted, the changes would come into effect from 1 July 2026, allowing six months for businesses and banks to adjust systems and pricing.
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Why is the RBA making this change?
RBA Governor Michele Bullock cited high costs and inefficiencies in Australia’s payment system as the primary driver for reform. Card surcharging, which has become common even for small-value transactions, was originally allowed in 2003 when card payments were a smaller share of total transactions.
Cards now account for the majority of consumer payments in Australia, making surcharges a routine cost for many transactions and a focus for regulators seeking to reduce cost-of-living pressures.
How does this affect Australian businesses?
The RBA estimates that 90% of businesses will benefit from the proposal due to reduced interchange fees and fewer customer complaints about surcharges.
However, businesses that have used surcharging to offset merchant fees will need to reassess their pricing strategy, as they will no longer be able to pass these costs on at the point of sale.
Finance professionals will need to review:
- Merchant service agreements and fee structures
- Pricing models and gross margin calculations
- Forecasts for changes in transaction cost profiles
Benefits of the surcharge ban for businesses
If passed in full, this proposal could help businesses:
- Lower overall transaction costs through reduced interchange fees
- Provide a better customer experience by eliminating contentious surcharges
- Achieve fairer pricing on fees for foreign-issued cards
- Improve negotiating power with banks and payment networks due to increased fee transparency
Risks and considerations for finance teams
While many businesses will see net savings, some may face new challenges:
- Businesses with thin margins that relied on surcharges will need to absorb fees
- Pricing updates may be required to ensure continued profitability
- Cash flow forecasts should reflect the removal of surcharge revenue
Finance teams and bookkeepers should proactively assess their exposure to surcharge revenue and plan for a transition well ahead of July 2026.
How Budgetly can help maintain expense visibility
While Budgetly is neutral to the surcharge proposal itself, our platform can support finance teams navigating these changes by:
- Providing real-time visibility into company expenses, including payment processing costs
- Helping businesses monitor changes in transaction fees as reforms roll out
- Allowing teams to categorise and track card-based spend accurately
- Offering integration with accounting software such as Xero to simplify reporting as payment costs shift
Budgetly’s subscription-based pricing means we are not dependent on interchange fees, unlike some US competitors. This ensures that our business customers continue to receive a transparent and predictable service—aligned to their needs, not merchant fees.
Looking ahead: Preparing for payment reform
The RBA’s proposal represents a fundamental shift in Australia’s payments landscape. While designed to reduce costs for consumers and most businesses, it will require careful planning from finance leaders, CFOs, and bookkeepers.
Now is the time to review transaction costs, revisit pricing models, and ensure systems and processes are ready for a surcharge-free future.
If your business is seeking better visibility and control over expenses, Budgetly is ready to help. Book a demo today and see how our expense management platform supports smarter financial decision-making.
