Credit card machine
Pixabay

The federal government is reportedly planning to give credit and debit cardholders relief from surcharges on every payment transaction by banning them altogether.

The move follows Reserve Bank of Australia's (RBA) estimates that annual surcharges total around AU$1 billion per annum, with some estimates suggesting the figure could even touch the AU$4 billion mark, ABC reports.

However, nothing has been finalized yet, and the ban's implementation remains subject to RBA approval. According to reports, the ban won't take effect before Jan. 1, 2026.

Months ago, Andrew Irvine, CEO of NAB, branded card payment surcharges as "outrageous" and outdated, which he believed added confusion and obscured true prices.

Chief executive of the Australian Chamber of Commerce and Industry Andrew McKellar supported the ban, insisting it would be largely beneficial for the businesses out there.

"In many cases, small businesses are facing these charges. It's not necessarily linked to the costs of providing the service," he was quoted by SBS, as saying. "In many cases, of course, they've got to pass it through, so it can amount to a significant proportion of the cost in the cost of a good or service that's been provided."

Co-founder of the Independent Payments Forum Brad Kelly said scrapping the surcharges should be a priority given that 12 billion card transactions happen every year.

"This is an important review for all Australians because the current situation costs every single one of us way too much, every time we shop," he said. "Currently small businesses and their customers pay the lion's share of these fees, with big business cutting special deals with the banks and card schemes. These unfair fees turn up for consumers as surcharges."

The government has earmarked AU$2.1 million in funding for the Australian Competition and Consumer Commission to materialize the ban.

The watchdog will monitor the illegal surcharging practices plaguing the market and also work to spread awareness among consumers about the impending changes, ABC reported.