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RBA bans surcharging with travel businesses to wear at least 1% cost increase from 1 October

The Reserve Bank of Australia has today banned surcharging on debit and credit cards, effective 1 October 2026, in a decision the Australian Travel Industry Association (ATIA) says will force up the cost of travel for every Australian and place travel businesses under unacceptable financial pressure.

Interchange fees have been reduced from 0.8% to 0.3% for domestic consumer cards. ATIA says the reduction will deliver little meaningful relief, because interchange is only one component of total payment costs. Once scheme fees and acquirer fees are added, travel businesses are looking at a total payment cost of at least 1% of transaction value and that cost has not been reduced by today's decision. It has simply been made invisible which will lead to every increasing price increases.

ATIA is warning members that prices across airfares, hotel bookings, tours and agent service fees will need to rise by at least 1% from 1 October to absorb costs that can no longer be recovered through surcharging. In a closed session today, the RBA confirmed it is not expecting price decreases as a result of its decision. ATIA believes price increases are inevitable, particularly in travel.

The RBA anchored its decision on data showing just 16% of businesses across the economy surcharge. ATIA disputes that figure. It was collected from institutions with a direct financial interest in today's outcome, and does not reflect the reality of the Australian marketplace. The 16% figure is not a credible basis for a decision of this consequence.

Travel businesses face payment costs that are structurally different from most of the economy. Transactions average $6,400 to $10,000, paid 70 to 100 days before travel. Acquirer bond requirements can exceed $1 million. Corporate card acceptance, which carries a higher interchange cap of 0.8% under the new arrangements, cannot simply be switched off for businesses serving the corporate segment. International cards will carry costs of around 1.5%, which must be absorbed into pricing for inbound operators.

ATIA will be briefing members shortly on next steps so they can understand the implications for their specific contract arrangements, and review pricing structures well ahead of the October implementation date.

Quotes attributable to ATIA CEO Dean Long

“The only stakeholders who will be happy with today's decision are Visa, Mastercard and the big four banks. Every business group in Australia that does not have a vested interest in protecting bank profit margins argued against this outcome. The RBA has chosen to back the schemes over Australian businesses and the consumers who will pay more because of it.”

“The RBA says this is net-neutral. There is no way it can be for travel. Interchange is only one part of what we pay. The full cost of accepting a payment in travel is well above 1% of transaction value, and that hasn't moved. What has changed is that we can no longer recover it transparently. It will go into base prices and every customer will pay it, whether they use a credit card or not.”

“The RBA has based this decision on the belief that only 16% of businesses surcharge. We understand that this data is derived from institutions who benefit directly from this decision, and it does not reflect what Australians actually experience. If you bought a coffee today, you paid a surcharge. If you booked a flight or a holiday, you paid a surcharge. The businesses that don't surcharge, supermarkets, pharmacies, lottery organisations, are the exception, not the rule. The 16% figure is wrong, and it has been used to justify a policy that will cost Australian consumers, and Australia’s small businesses real money.”