Most of the conversation around the RBA’s October 2026 reforms has focused on one thing: the surcharge ban. And understandably so, as it’s the change customers will notice at checkout.
But there’s a second part of the reform package that matters just as much for business owners.
From 1 October 2026, the caps on interchange fees (the underlying cost embedded in every card transaction you accept) are being reduced.
Here’s what interchange fees are, how the new caps work, and what you should actually be doing about it before October.
What are interchange fees?
Every time a customer pays by card, a small fee is processed by the payment network before the money reaches your account.
That fee, the interchange fee, is paid by your bank (the acquirer) to the card issuer, typically the customer’s bank. It then flows through to you as part of your merchant service fee: the percentage or flat rate you see on your monthly statement.
Interchange fees vary based on the card type (debit, credit, prepaid, commercial), the network (Visa, Mastercard, eftpos), how the transaction was made (tap, insert, online), and whether the card was issued domestically or overseas.
The RBA has regulated interchange fee caps in Australia since the early 2000s. What’s changing in October is that those caps are being reduced — in some cases, significantly.
What’s changing from 1 October 2026
The Payments System Board has confirmed the following new interchange fee caps, effective 1 October 2026:
- Debit and prepaid cards: The cap drops from 0.2% (10 cents per transaction) to 0.16% (8 cents per transaction).
- Consumer credit cards: The cap drops from 0.8% to 0.3%. The weighted-average benchmark that previously applied across all credit card transactions is also being removed.
- Commercial credit cards: The existing 0.8% cap is being retained. The RBA has kept this separate to support competition in commercial card issuance — particularly relevant given American Express’s significant share of the commercial card market.
A second phase of changes takes effect from 1 April 2027, when a new cap on foreign-issued card interchange will also come into force. Despite foreign cards making up only around 3% of transactions in Australia, they currently account for approximately 20% of total interchange fees paid by merchants! So this second tranche will matter for businesses that regularly serve international customers.
How much could this save your business?
The RBA’s own estimate puts the total reduction in merchant payment costs at around $910 million per year across the Australian economy. Small businesses are expected to benefit the most — because they typically pay fees closest to the current caps, while larger merchants have often negotiated strategic rates below them.
In practical terms, the reduction in the credit card cap is the most significant. A business currently paying close to 0.8% on consumer credit card transactions could see those costs fall considerably.
It’s worth noting that the full benefit won’t automatically appear on your statement. The RBA has required acquirers to publish quarterly data on how they’re passing through interchange reductions, starting from 30 January 2027. That accountability mechanism is new, and it means there’ll be a way to check whether payment providers are actually reflecting lower caps in their charges to merchants.
The transparency changes that come with it
Alongside the fee reductions, the RBA is requiring card networks and acquirers to publish detailed cost and fee data from 1 October 2026. This includes quarterly interchange fees, scheme fees, and merchant service fees.
This matters because scheme fees have grown steadily as a share of total acceptance costs, with very little public visibility. Making this data available gives businesses a genuine basis for comparing what they’re paying across providers.
If you’ve ever tried to decode a merchant statement and couldn’t work out what you were actually paying for each transaction type, this reform is aimed directly at that problem.
What about the surcharge ban?
If you’ve already read our article on the surcharge ban, you’ll know these two reforms are intentionally paired. The RBA’s position is clear: removing surcharges without reducing the underlying cost of card acceptance would simply redistribute costs onto merchants without fixing anything.
The interchange cap reductions are the mechanism for making the surcharge ban workable for businesses. They’re two sides of the same reform.
What’s not included
A few things worth knowing about scope:
- American Express operates a closed-loop system and issues its own cards, so it’s not subject to the RBA’s interchange caps. The RBA has flagged a further review of three-party networks (including Amex) commencing mid-2026.
- Digital wallets (Apple Pay, Google Pay) are not directly covered by these interchange changes, though the transactions they facilitate on Visa and Mastercard networks will still be subject to the new caps.
- BNPL is under a separate regulatory process.
What you should do before October
1. Find out what you’re actually paying now
Request an itemised breakdown from your payment provider — debit fees separate from credit, and ideally broken down by network. Many businesses use blended pricing that bundles everything into a single rate, making it harder to see where costs sit and to benchmark savings when caps change.
2. Ask your provider how they’ll pass through the reductions
Lower interchange caps don’t automatically mean a lower merchant service fee, as that depends on how your provider structures pricing. Ask directly: when the credit card interchange cap drops from 0.8% to 0.3% in October, how will that be reflected in my charges?
3. Check whether least cost routing is enabled on your terminal
Interchange cap reductions apply at the network level, but least cost routing gives you an additional layer of control over which network your debit card transactions run through. If you’re not already using it, it’s worth understanding before October.
4. Review your pricing model
If you’re on a flat-rate or bundled plan, the interchange reductions may not flow through to you as directly as they would on an interchange-plus arrangement. October is a reasonable trigger point to review which pricing structure makes sense for your transaction volume and card mix.
The bottom line
The surcharge ban is the headline. But lower interchange caps are the reform that will have a more lasting effect on the cost of accepting card payments in Australia, particularly for smaller businesses that have been paying closest to the existing rate ceiling.
The savings won’t land automatically. How much benefit you see will depend on your current pricing arrangement, your card mix, and whether your payment provider actually passes the reductions through. Getting informed before October is worth the hour it takes.
If you want to talk through your current merchant fee setup, the team at Venue Smart is here to help.
Sources
- Reserve Bank of Australia, Review of Merchant Card Payment Costs and Surcharging — Conclusions Paper, March 2026: rba.gov.au
- RBA Media Release MR-26-10, March 2026: rba.gov.au
- Allens, RBA’s payment shake-up: implications for merchants and payment service providers, July 2025: allens.com.au
- CMSPI, Reviewing Australia’s Payment Reform, March 2026: cmspi.com