Australian merchants face rising card fees as surcharge transparency ends

By Newsdesk

May 26 2026
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Australian merchants are grappling with a significant increase in card fees, with new research revealing a $175 million rise over the past year. This surge is not due to increased consumer spending but rather a rise in the fees charged by card schemes. The findings, based on data from the Reserve Bank of Australia (RBA) analysed by Money.com.au in collaboration with Primara Research, highlight a challenging landscape for merchants as they navigate these escalating costs.

Australian merchants face rising card fees as surcharge transparency ends

The study, which examined retail payments data up to March 2025, indicates that the increases are uneven across different card schemes. While Visa, Mastercard, and eftpos have all raised their fees, American Express has bucked the trend by lowering its charges. This suggests that the card schemes themselves are largely responsible for the changes, rather than shifts in consumer behaviour.

The impending ban on merchants passing card fees on to consumers as surcharges, set to take effect in October 2026, adds another layer of complexity. While this regulatory change aims to simplify the payment process for consumers, it effectively conceals the true cost of these transactions. Instead of being itemised as a surcharge, the fees will be embedded in the prices of goods and services.

Peter Drennan, Head of Research and Data at Primara Research, emphasised the impact of this shift. "Australians tap their debit card assuming it is the low-cost option, but these figures show that assumption is increasingly wrong," he said. "Every fee increase gets absorbed somewhere. Right now merchants can show it as a surcharge. From October, that transparency disappears, and it gets baked into prices instead."

**Debit card fees on the rise**

A significant portion of the fee increase is attributed to debit cards, traditionally perceived as a cost-effective payment method. However, this perception is being challenged by the data. Debit card fees accounted for $147 million of the total $175 million increase, with all three major schemes raising their rates over the past year. Visa debit fees rose by 8%, from 0.53% to 0.57%, Mastercard debit fees increased by 4%, from 0.57% to 0.59%, and eftpos fees went up by 5%, from 0.40% to 0.42%.

Merchants paid a staggering $3.5 billion in debit card fees alone over the 12 months to March 2025. Had the rates remained at their December 2024 levels, this figure would have been $3.39 billion. The data underscores the rapid acceleration of debit card fees, which are outpacing those associated with credit cards.

Overall card fee burden

The total card fees paid by Australian merchants now stand at approximately $8 billion annually, spread across $1.14 trillion in card transaction volume. Credit cards still account for 59% of the total fees paid, but it is the debit card fees that are increasing at a faster rate.

The upcoming changes in fee transparency are expected to have a profound impact on both merchants and consumers. With the elimination of surcharges as a separate line item, consumers will no longer have visibility into the cost of card transactions. This lack of transparency could lead to higher prices for goods and services, as merchants adjust their pricing to accommodate the embedded fees.

The RBA's decision to ban surcharges is aimed at simplifying the payment process and reducing consumer confusion. However, the unintended consequence may be that Australians end up paying more without realising it. As Peter Drennan noted, "From October, that transparency disappears, and it gets baked into prices instead."

As the October 2026 deadline approaches, businesses and consumers alike will need to adapt to this new landscape. For merchants, the challenge will be to manage their costs while maintaining competitive pricing. For consumers, the task will be to remain vigilant about the true cost of their purchases, even as the details become less transparent.

In the face of these changes, the dialogue around card fees and payment transparency is likely to continue, with stakeholders from all sectors seeking solutions that balance simplicity with fairness.

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