Commonwealth Bank Pushes to Eliminate Card Surcharges

The Commonwealth Bank (CBA) is urging the Reserve Bank of Australia (RBA) to scrap surcharges on all credit and debit card payments, arguing that these fees are costing Australians hundreds of millions each year.

Right now, the federal government is already considering banning surcharges on debit card payments starting next year. But in a bold move, CBA has suggested going even further—completely eliminating all types of surcharges, according to reports from the Australian Financial Review.

If this proposal is adopted, Australia would follow in the footsteps of regions like Europe and the UK, where surcharges are entirely banned. In the US and Canada, debit surcharges are also illegal, although businesses there can still charge for credit card payments.

What Are Card Surcharges, and Why Do We Pay Them?

Card surcharges are those little extra fees—typically between 0.5% and 1.5%—you might notice when paying with a card. Businesses add these charges to cover their own costs for processing card payments, called "merchant fees."

Under Australian law, businesses can’t charge you more than what they pay their bank to process these payments. For instance, if a café is charged 0.5% for card payments, they’re not allowed to pass on a surcharge higher than that. While there are detailed regulations around this, CBA argues that the system is still unfair and overly complicated for consumers.

Why Scrap Surcharges?

CBA believes that banning all surcharges is the simplest way to ensure fairness for shoppers. They’ve raised concerns that, if only debit surcharges are banned, credit card users might still face unclear or higher fees. Worse, some businesses could start increasing fees for credit card transactions to make up for lost revenue.

Eliminating surcharges entirely would create a level playing field for consumers and align Australia with international standards, CBA says.

The RBA is still reviewing the issue, but if this proposal is taken on board, it could mean no more surprise fees when you pay by card—something many shoppers would likely welcome.