The Reserve Bank of Australia (RBA) has announced a ban on surcharging for debit and credit card transactions, effective from 1 October 2026. This decision, according to the Australian Travel Industry Association (ATIA), will lead to increased travel costs for Australians and impose financial strain on travel businesses.
Interchange fees have been reduced from 0.8% to 0.3% for domestic consumer cards. However, ATIA argues that this reduction offers minimal relief as it does not cover the full payment costs, which include scheme and acquirer fees. These additional costs mean that travel businesses will face a total payment cost of at least 1% of transaction value, a cost that cannot be recovered through surcharging anymore.
ATIA warns that prices for airfares, hotel bookings, tours, and agent service fees will need to rise by at least 1% to cover these costs. The RBA, in a closed session, confirmed it does not anticipate price decreases following its decision. ATIA disputes the RBA's data, which suggests only 16% of businesses surcharge, arguing it does not reflect the reality of the Australian market.
Travel businesses, which deal with transactions averaging $6,400 to $10,000, face unique payment cost structures. The acceptance of corporate cards, with a higher interchange cap of 0.8%, and international cards, with costs around 1.5%, further complicates pricing for inbound operators.
ATIA CEO Dean Long criticised the decision, stating, “The only stakeholders who will be happy with today's decision are Visa, Mastercard, and the big four banks.” He emphasised that the decision is not net-neutral for the travel sector, as the full cost of accepting payments remains above 1% of transaction value.
ATIA plans to brief its members on the implications of this decision and advise on pricing strategies ahead of the October implementation
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