Seven of twenty: the card fee cuts most merchants haven't received

Only a handful of card acceptance plans have passed on the Reserve Bank's interchange reduction, and the data that would settle the question does not land until January.

Australian businesses stopped surcharging card payments on 1 October, when the Reserve Bank of Australia (RBA) lifted its long-standing prohibition on card networks imposing no-surcharge rules and eftpos, Mastercard and Visa promptly imposed them. The same reform package cut the cap on interchange, the wholesale fee an acquiring bank pays the card issuer on every transaction. 

For domestic-issued consumer credit cards that cap fell from 0.8 per cent to 0.3 per cent. Together with a new 1.0 per cent cap on foreign-issued cards and a smaller reduction on debit, the RBA estimated the changes would lower wholesale costs for merchants by around A$910 million a year.

Small merchants were the intended beneficiaries, and the RBA's own numbers show why. The average interchange rate on consumer credit sits at 0.47 per cent, but small merchants pay up to the old cap of 0.8 per cent while the largest merchants negotiate strategic rates as low as 0.18 per cent. Lowering the ceiling was meant to close that gap.

Three weeks on, Compayr, a comparison site built by payments industry veteran Dougal Anderson, went through twenty popular card acceptance plans and found seven where the merchant has seen anything come back. Westpac made the largest move, dropping the flat transaction fee on its point of sale terminals from 1.2 per cent to 0.79 per cent.

 

Commonwealth Bank, NAB, ANZ Worldline, Zeller and Shopify cut their in-person flat rates and Stripe trimmed its online rate, with reductions running from 0.05 to 0.2 percentage points. Exactly one plan passed on the full half a percentage point: Commonwealth Bank's interchange plus pricing, where the merchant pays the interchange fee itself plus a stated margin, so a cut at the wholesale level reaches the business automatically.

That distinction does most of the work here. Flat rate plans bundle interchange, scheme fees and the acquirer's margin into a single headline number, and nothing in the reform obliges an acquirer to move it. Merchants on those plans get the saving when their provider decides to hand it over, or when they switch.

There is also a category the reform deliberately left alone. The RBA retained the interchange cap on domestic-issued commercial credit cards at 0.8 per cent, judging that cutting it would hand American Express an advantage in a segment it already dominates. A business whose customers pay on company cards will see less of this saving than the headline suggests.

Anderson's rankings carry a disclosure: Compayr earns referral fees from some of the providers it lists. The analysis also leaves out terminal rental charges and the cost of exiting a contract, either of which can swallow a 0.2 percentage point gain on modest turnover.

The RBA built a transparency regime for this exact question and it arrives in two parts. From 30 October, the card networks and large acquirers must publish quarterly fee data. 

That first release covers July to September, the quarter before the caps changed, so it sets a baseline and reveals nothing about pass-through. The number that answers the question, a published measure of how much of the interchange cut each large acquirer handed on, is not due until 30 January 2027 and covers the December quarter.

Politics is moving faster than the data. Emergency Management Minister Kristy McBain suggested this month that the RBA could go further and require banks to absorb merchant acceptance costs altogether.

If you are on a flat rate plan, the half a percentage point is not coming to you on its own. Ring your provider, ask what your effective rate was in September and what it is now, and get the answer in writing. Then price an interchange plus plan against it, because that is the structure where a wholesale cut reaches you without anyone's permission. Check what share of your takings arrives on commercial cards before you forecast the saving, since that rate did not move. The January publication will show pass-through well short of the full cut across bundled plans, and the RBA will spend the first half of 2027 naming the acquirers that kept the difference. Businesses that switch before Christmas will have banked three quarters of savings by the time that argument is settled.