SYDNEY, March 31 (Reuters) - Australia's central bank said on Tuesday that it would end surcharges on debit and credit card payments for consumers from October 1, while lowering interchange fees paid by businesses in steps estimated to save about A$2.5 billion a year.
After concluding a year-long review, the Reserve Bank of Australia said the surcharging network, which was introduced more than two decades ago, no longer worked as intended and it would remove card surcharging on designated eftpos,
Mastercard and Visa networks.
"The increased prevalence of businesses surcharging all cards at the same rate, challenges with enforcing the current surcharging framework, and consumers using less cash have reduced the effectiveness of the surcharging regime," the RBA said in a statement.
American Express has a separate agreement with the RBA and is not subject to these rule change.
In an RBA survey of 3,000 Australian consumers, about three quarters of them viewed surcharging as unnecesssary and should stop. The end of surcharges was expected to save Australian consumers A$1.6 billion a year.
Capping interchange fees would lower businesses' costs by about A$900 million a year and benefit small firms the most, the RBA said.
The central bank is also planning to start a public consultation in mid-2026 to assess public interest for regulating areas of the retail payment system that were not covered under this review, including mobile wallets and "buy now pay later" services.
(Reporting by Stella Qiu; editing by Wayne Cole)
Keywords: AUSTRALIA RBA/PAYMENTS
