RBA scraps card surcharges despite Hospitality pushback
Images: Reserve Bank of Australia (RBA), Shutterstock
The Reserve Bank of Australia (RBA) has announced the elimination of debit and credit card surcharges, a blow to the hospitality sector, which opposes the move.
The RBA's review of merchant card payment costs recommended scrapping fees on EFTPOS, Mastercard and Visa transactions, finding they no longer serve their original purpose and are costing Australian shoppers an estimated $1.6 billion annually.
In its findings, the central bank said the surcharging framework — introduced more than two decades ago — had lost its effectiveness, with businesses increasingly applying blanket surcharge rates across all cards regardless of actual transaction costs, while cash usage continues to decline.
The decision drew a swift and pointed rebuke from the Australian Hotels Association, whose CEO Stephen Ferguson said the move "doesn't pass the pub test" and accused it of serving the interests of multinational payment networks over consumers and small operators.
"It's all smoke and mirrors — consumers and small businesses have been abandoned in the middle of a cost-of-living crisis," Ferguson said, questioning whether the change would actually deliver cheaper coffee or beer for patrons.
"What was the purpose of the whole exercise if it wasn't to decrease costs for consumers?" he said, arguing the real winners would be "foreign-owned companies like Visa, Mastercard and the big banks."
On the ground, the sentiment among venue operators was equally bleak. Oliver Brown, co-founder of the Big Easy Group and the operator behind popular Adelaide venues including The Stag, La Louisiane, Nola and Tarantino's, said the decision "doesn't make any sense."
"We talk about aiming for 10 per cent profitability, and that's a fine line enough as it is, but that includes passing on the surcharges," Brown told InDaily. "If you remove that, you're going to remove 15 to 20 per cent of a business's profit overnight. All it's going to do is push prices up."
Brown warned the ruling would compound existing cost pressures, including rising wages, fuel and materials costs, landing at a particularly difficult time for the sector.
"All they're doing is compound in on an industry which already has one in 10 venues closing," he said.
Not all stakeholders were opposed. Small and Family Business Minister Nadia Clandy welcomed the announcement, pointing to accompanying reductions in interchange fee caps as a potential relief for smaller operators, noting they "often pay fees closer to the existing caps."
The South Australian Business Chamber acknowledged the consumer benefit but urged caution. General manager Kendall Crowe said while removing surcharges would "reduce friction" for consumers, "it's important to recognise that the underlying costs for businesses don't disappear."
"While the RBA says these changes will mean simpler, more transparent pricing, the test will be whether businesses are left better off, not worse," she said.
The announcement arrives as South Australian businesses face mounting financial strain on multiple fronts. National insolvency firm Jirsch Sutherland this week flagged rising insolvency risks across construction, hospitality and retail, with SA-based partner Yulia Petrenko warning that economic pressures had become structural rather than temporary.
Petrenko cautioned that the surcharge decision would add to an already difficult picture for small business owners. "Lowering operational expenses would be a challenging task, and forced price increases might potentially cause customers to 'shop elsewhere,'" she said, adding that both business and personal insolvency rates in South Australia were expected to trend upward.
Jonathan Jackson, 1st April 2026
