Massive change to credit and debit card payments just weeks away

A huge number of Australian credit and debit card holders remain in the dark about the upcoming ban on surcharges, new research shows.

Extra fees for payments will be abolished on October 1 following a decision by the Reserve Bank of Australia (RBA), in a move it estimates will save consumers about $1.6 billion every year.

But a survey of 1000 people by comparison site Finder released on Tuesday shows 43 per cent of Australians are unaware of the upcoming shake-up.

Scrutiny of RBA data shows Australians made $475 billion in credit card purchases and $696 billion in debit card transactions during the 12 months to June 2026.

The Finder analysis also tracked consumer sentiment about financial institutions recovering money by raising interest rates or card fees and cutting customer loyalty programs.

Banks will take a hit of about $600 million per year when the surcharge ban comes into force.

This will include lower interchange fees, which are paid by businesses to banks.

If their card provider responded to the ban by increasing annual fees, 30 per cent of responders in the Finder survey say they’d respond by cancelling their credit card.

Winners and losers

The surcharge ban is good news for some and bad for others, says Finder personal finance specialist Taylor Blackburn.

“Someone still has to cover the cost of running card payments, and that’s now most likely going to be frequent flyer and rewards credit card holders,” he said.

Many credit and debit cards are likely to become more expensive and less rewarding as banks claw back money by offering less perks for card holders along with higher annual fees and less earning rates.

“We’re already seeing it happen. Some cards have slashed sign-up bonus points by almost half, while others have introduced annual fees on cards that used to be free, or hiked existing fees,” said Blackburn.

He advises card holders to check whether their points system is still competitive.

“A card that was a great deal 12 months ago might now come with a higher fee, or a much lower earn rate, for the same spending.”

According to the ACCC, it is likely that businesses will absorb the costs and pass them on indirectly via product or service pricing.

“Businesses will still incur costs when accepting card payments after surcharging is removed,” the watchdog advises.

“However, these costs will need to be reflected in a business’s overall pricing for the products or services it sells, rather than charged as a separate surcharge.

“Businesses should review and update their pricing and how they display and communicate their prices to customers to make sure they accurately reflect the total price payable.”

Businesses will not be allowed to mislead customers about the reasons for price increases.

How would it work in real-world terms?

This scenario from the ACCC is the perfect example:

A hair salon charges $60 for a haircut and currently applies a 1.0 per cent credit card surcharge.

From 1 October 2026, the hair salon can no longer apply a credit card surcharge. The salon decides to incorporate its card processing costs into its overall prices. This would mean the price of the haircut would be $60.60.

However, the salon also reviews its other costs and decides to increase the price of a haircut to $65, because energy and labour costs have also increased.

In this situation, the hair salon must not tell consumers that the price increase is due to the changes to card payment surcharging.

This will be misleading because the price increase also reflects other business costs, not just the cost of accepting card payments.

How banks responded

During past weeks, the major banks announced how they will recover money leading up to the surcharge ban.

St George has announced it is lifting the interest rate on its Amplify Qantas Platinum credit card from 20.99 per cent to 23.99 per cent, while its annual fee will increase from $75 to $125.

The bank has also dropped the interest-free period on purchases by 10 days.

Westpac, meanwhile, will be lifting the interest rates on some of its credit cards and will also be increasing annual fees.

NAB credit card interest rates will be hiked by 1.5 per cent too.

Commonwealth Bank has responded by announcing major changes to its Commbank Awards program, which allowed credit card users to earn points, with a revamped CommBank Yello loyalty and points scheme.

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