From October 1, 2026, Australians will no longer pay a fee for debit, prepaid and credit payments using eftpos, Mastercard and Visa cards. The Reserve Bank of Australia estimates the change could save consumers around A$1.6 billion a year.

The case for change sounds simple enough: one price, no add-ons, no surprises at the end of a transaction.

But credit card companies, banks, restaurants and others are already warning they could raise fees and prices in other areas once card surcharges are banned.

That means we could see costs shifting, rather than falling.

How a card payment actually works

Most people experience paying by card as a direct exchange with a shop. Behind that tap, several other parties are quietly collecting their share before your money reaches the shop.

When you pay at a cafe, your bank approves the transaction and releases the funds. The cafe’s bank receives that money on the business’s behalf. Between them sits the card network – usually Visa or Mastercard – routing the payment from one to the other.

Then there’s the payment service provider, the company behind both the software processing the transaction and the physical device you tapped your card on.

Each of them charges for what they do. When a business applies a surcharge on card payments, it’s trying to claw back some of these costs.

The single largest charge is the interchange fee, currently capped at 0.8% of your purchase for credit cards and 0.2% for debit cards, paid to banks.

The Reserve Bank regulates most of these fees (other than the payment service provider fees) and its........

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