Credit card machine
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Major Australian airlines Virgin Australia and Qantas have opposed proposals to eliminate credit card surcharges, stating it might result in more expensive tickets.

The airlines' position coincides with the Reserve Bank's consideration of suggesting modifications to the government about the controversial fees, which have been the subject of growing discussion as more Australians abandon cash transactions.

The airline move follows the Reserve Bank's consideration of suggesting modifications to the government in connection to controversial fees, which spurred widespread discussion as more Australians abandon cash transactions, reported The Sydney Morning Herald.

Currently, Australian businesses are permitted to charge a fee to clients who use debit cards; however, this fee is limited to the actual cost to the business, which is usually between 0.5% and 1% of the purchase. However, in order to safeguard consumers and small businesses, Treasurer Jim Chalmers has stated plans to perhaps outlaw debit card surcharges by January 1, 2026, pending a Reserve Bank study.

Australian businesses are permitted to charge a fee currently to clients using debit cards. however, this fee is restricted to the actual cost to the business, which is usually between 0.5% and 1% of the purchase.

However, Treasurer Jim Chalmers declared rolling out plans to outlaw debit card surcharges by Jan. 1, 2026, to safeguard the interest of small businesses, which is pending a Reserve Bank study.

"In the current inflationary environment, many merchants are facing increased costs of doing business and a removal of the ability to surcharge may result in a proportionate increase in the price of the underlying product," the airline's submission reads.

Virgin Australia said removing surcharges may impact consumers who choose to pay with credit cards to access additional benefits such as loyalty points and purchase protections.

Payment surcharges are regulated by the Australian Competition and Consumer Commission (ACCC) to shield customers from exorbitant costs. Although surcharges are permitted, they cannot be greater than the actual cost of processing the payment.

Businesses are required to clearly and conspicuously display fees, and the ACCC offers criteria for determining acceptable surcharges. Customers can notify the ACCC about excessive surcharges, and companies that violate the law risk fines and penalties.