This article was published on Capital Brief on 1 April 2026.
The Reserve Bank's decision to remove card surcharging from October has been framed as an easy win for consumers. Prices will be clearer, checkout will be simpler, and most people will no longer be surprised by a fee they can't easily avoid.
But surcharging has always been a symptom of the underlying cost of card payments, not the root cause. Surcharging was designed to create a price signal, encouraging consumers to choose lower-cost payment methods. In practice, that signal got weaker. Many businesses now apply flat surcharges across all cards, enforcement is inconsistent, and consumers have fewer realistic ways to avoid a fee.
Removing surcharging ultimately shuffles that cost on. Businesses will absorb it or build it into their prices. The RBA itself expects that many merchants will adjust advertised prices accordingly.
The Convergence of Reform: Surcharging, Licensing, and Infrastructure
Three major changes are going forward at about the same time: the surcharge ban, a redesign of payments licensing, and the continued evolution of account-to-account infrastructure. Each is being treated as a separate conversation — a consumer pricing issue, a regulatory update, a future-state technology discussion — but they’re actually deeply linked.
In practice, they are interconnected levers that will determine how costs are distributed across the system, who can participate and on what terms, which payment methods are used in everyday transactions, and where risk and responsibility ultimately sit.
The licensing regime is being redesigned to better reflect how modern payment systems operate. The regulatory perimeter is expanding, and new questions are emerging around digital wallets, buy now, pay later and platform economics.
The Rise of A2A: Australia’s Strategic Shift to Real-Time Rails
At the same time, Australia already has domestic account-to-account (A2A) infrastructure that is modern, scalable and materially lower cost in many use cases. If anything, the surcharge ban strengthens the merchant incentive to adopt lower-cost rails, accelerating the shift toward real-time A2A payments at checkout. A2A is quickly becoming a strategic battleground and a pathway to capturing share at checkout.
This transition is already well advanced internationally. Markets like Brazil with Pix, India with UPI, and the Netherlands with iDEAL have seen A2A become the default payment method, driven by strong user experience, embedded incentives, and superior payments economics for merchants.
In each case, A2A moved from a back-end alternative to the dominant method at the point of sale. This was driven by better technology, but also by regulatory settings that allowed lower-cost rails to compete on equal terms.
The Execution Challenge: Scaling Trust and Efficiency
Australia is in a strong position to take advantage of this. The infrastructure exists, the direction of travel is clear, and there is broad alignment on the need to improve how payments work.
The question is whether that alignment translates into coherent execution.
In practice, that means ensuring pricing, infrastructure and regulation work together so that better payment options can be delivered and scaled — with consistent user experience, lower costs at scale, and fair access for a broad range of participants. It also means building a system that people can trust: where payments are not only efficient, but safe, secure and resilient in everyday use.
This requires coordination across the ecosystem — from banks and payment providers to regulators and infrastructure operators — so that better alternatives can be implemented in practice, not just defined in policy, and so that trust and reliability are maintained as the system evolves.
The Risk of Stagnation: Why Cohesion is Non-Negotiable
If we get this right, competition will increase, lower-cost payment methods will grow on their merits, and both merchants and consumers will benefit from a system that is not only more efficient, but more transparent and dependable.
If we get it wrong, the risk is more subtle but significant. The system may become simpler on the surface, but the underlying cost structure remains unchanged. Payment flows continue to be shaped by a relatively concentrated set of players, limiting competitive pressure and slowing innovation.
That would reduce the impact of reform, reinforce existing behaviours, and risk weakening confidence in the system over time, particularly if new payment options are not delivered with the reliability and safeguards users expect. It would also leave Australia at risk of falling behind global peers where real-time, lower-cost and highly trusted payment models are scaling rapidly.
Moments like this are vanishingly rare. The focus now should be ensuring that individual policy decisions — on surcharging, licensing, infrastructure and risk — work together toward that broader objective. Regulatory settings, combined with practical implementation in the ecosystem, will determine whether better payment options are able to scale, or whether the current system is simply reinforced in a different form.
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