Australia: Scheme & Network Compliance

Scheme & Network Compliance

The Reserve Bank of Australia's card-surcharge ban and interchange-fee reform package reached full effect on 1 October 2026, closing an 18-month review process concluded in the RBA's 31 March 2026 Conclusions Paper. From that date, businesses may no longer apply a surcharge to card payments made using eftpos, Mastercard, Visa, American Express or UnionPay debit, prepaid or credit cards, regardless of whether the card is domestically or foreign-issued, and regardless of channel, covering both in-store and online transactions. This is a comprehensive ban in scope: it reaches every major scheme operating in the Australian market and both card-present and card-not-present transaction types.

Accompanying the surcharge ban, lower domestic interchange-fee caps for Australian-issued cards also took effect on 1 October 2026. The reform is structured in two stages: caps on foreign-issued cards will follow on 1 April 2027, meaning the full interchange reform will not be complete until that later date. Acquirers additionally face new reporting requirements obliging them to publish the fees they charge, a transparency measure that gives merchants and the broader market visibility into acquiring costs previously disclosed less consistently across providers.

The mechanism chosen to enforce the surcharge ban is the most structurally distinctive feature of this reform. Rather than relying on direct statutory enforcement by the Australian Competition and Consumer Commission, compliance is driven contractually: the RBA directed card networks and, through them, acquirers and terminal providers, to remove surcharging functionality from their systems, so that the technical capability to surcharge is withdrawn at the infrastructure level rather than policed after the fact through complaint-driven investigation. The ACCC continues to enforce its pre-existing excessive-surcharging rules separately from this new blanket ban, meaning two enforcement tracks now operate in parallel: a contractual, scheme-level mechanism preventing surcharging from occurring at all for the newly banned categories, and a statutory, complaint-driven mechanism addressing excessive surcharging that falls outside the ban's scope or predates it.

This is an architecture choice with real consequences for how disputes will be resolved. A merchant that attempts to surcharge in breach of the ban faces action through its card-network merchant agreement rather than a regulatory enforcement notice in the first instance, which shifts the practical locus of enforcement from a public regulator to private commercial relationships governed by scheme rules. Whether this proves as robust as direct statutory enforcement will depend on how consistently the card networks apply their own contractual sanctions across the acquiring ecosystem.

Outlook

The second stage of the interchange reform, extending lower caps to foreign-issued card transactions, is scheduled for 1 April 2027, which will complete the RBA's two-stage interchange package roughly eighteen months after the review's conclusions were published. In the interim, the practical test of the surcharge ban will be whether contractual enforcement through merchant agreements successfully eliminates surcharging at scale, or whether gaps emerge that drive merchant complaints back toward the ACCC's parallel excessive-surcharging enforcement track. The new acquirer fee-transparency reporting requirement may also generate comparative data in coming periods that sheds light on whether the lower interchange caps are being passed through to merchants as intended.