Fee building blocks, pricing models and 2026 rules
Interchange caps from October 2026 and the foreign-card cap from April 2027
The new RBA interchange caps for debit, prepaid, consumer and commercial credit and foreign-issued cards, how caps and benchmarks work, and what the cuts should mean for your fees.
From 1 October 2026, the Reserve Bank of Australia's caps on interchange for domestic-issued cards on eftpos, Mastercard and Visa are: 8 cents (or 0.16% if expressed as a percentage) for debit and prepaid cards, 0.3% for consumer credit cards and 0.8% for commercial credit cards. From 1 April 2027, a new cap of 1.0% applies to interchange on all foreign-issued cards used in Australia. Interchange is paid by your acquirer to the cardholder's bank, so the caps cut your costs only to the extent that your provider passes them through. On cost-plus pricing that happens automatically; on flat or blended pricing, ask.
This guide is part of the overview of merchant payment processing fees. For the layers of a card fee, see interchange, scheme fees and margin.
The caps, old and new
| Category | Before 1 October 2026 | From 1 October 2026 | From 1 April 2027 |
|---|---|---|---|
| Domestic debit and prepaid, including single-network and commercial debit | Cap 10 cents or 0.2%; 8-cent weighted-average benchmark | Cap 8 cents or 0.16%; 8-cent benchmark kept | Same |
| Domestic consumer credit, including consumer charge cards | Cap 0.8%; 0.5% weighted-average benchmark | Cap 0.3%; benchmark abolished | Same |
| Domestic commercial credit, including commercial charge cards | Cap 0.8%; shared 0.5% benchmark | Cap 0.8%; benchmark abolished | Same |
| Foreign-issued cards (debit, prepaid, credit; in person and online) | Not capped | Not capped | Cap 1.0% |
Source: RBA, Review of Merchant Card Payment Costs and Surcharging, Conclusions Paper (31 March 2026), interchange fees chapter and implementation timeline.
How caps and benchmarks work
- A cap is the most any single interchange rate in a network's schedule can be for that category.
- A weighted-average benchmark limits the average across all of a network's rates in that category over a period. The networks can set some rates high and others low as long as the average stays within the benchmark.
- With the debit cap and benchmark both at 8 cents, no debit interchange rate can exceed 8 cents (or 0.16%).
The caps apply to the interchange paid on each transaction, not to your total merchant service fee. Scheme fees and your provider's margin are added on top.
The RBA also amended the net compensation rules from 1 October 2026: receipts from overseas-acquired transactions on Australian-issued cards now count in the assessment, and Australian issuers sponsored into a network through a foreign entity are treated as direct issuer participants. These rules stop issuers receiving through other payments from a network what the caps prevent through interchange.
What the RBA's data says about the starting point
The interchange chapter of the Conclusions Paper gives some reference points (data periods as stated in the paper):
- Average interchange on consumer credit cards was about 0.47%, so the 0.3% cap is a material cut for many businesses.
- Average interchange on foreign-issued cards was about 1.75%, well above the new 1.0% cap.
- Small merchants paid about 0.13 percentage points more per debit transaction than large strategic merchants.
The RBA estimated that issuers' interchange revenue would fall by about $660 million a year. It expects small merchants to benefit most because they had least access to lower strategic rates.
Worked examples: what the cuts could be worth
Illustrative figures, assuming full pass-through on cost-plus pricing.
Domestic consumer credit. A homewares shop takes $18,000 a month on domestic consumer credit cards. If its average credit interchange was 0.5% before and is 0.3% now:
- Before: $18,000 × 0.5% = $90
- After: $18,000 × 0.3% = $54
- Saving: $36 a month, $432 a year
Debit. A café makes 2,000 debit payments a month. If its average debit interchange fell from 9 cents to 7 cents:
- Saving: 2,000 × $0.02 = $40 a month, $480 a year
Foreign cards from April 2027. A tour operator takes $20,000 a month on foreign-issued cards with average interchange of 1.75%:
- Before the cap: $20,000 × 1.75% = $350
- At the 1.0% cap: $20,000 × 1.0% = $200
- Possible saving: $150 a month, $1,800 a year, from 1 April 2027
Foreign-card payments may still cost more than domestic ones because of cross-border scheme fees and currency services, which are not capped.
What to do now
- Find your card mix. Your statement should split transactions by card type and, from the new statement rules, by network and channel. See merchant statements.
- Compare September and October 2026. On cost-plus pricing, interchange lines should have fallen for the same card mix.
- Ask your provider in writing how the 1 October 2026 changes affected your rates, especially on flat or blended pricing.
- Check published averages. Large acquirers must publish average merchant fees for small merchants quarterly from 30 October 2026, and their interchange pass-through measure from 30 January 2027.
- Get a new quote if your rates did not move. Use the card fee calculator on both.
- If you serve tourists, diarise 1 April 2027 and ask how the foreign-card cap will be reflected.
What the caps do not cover
- American Express and other three-party networks are not covered by the interchange standards.
- Scheme fees are not capped; the RBA expects scheme fee roadmaps by 1 April 2027.
- Your provider's margin is not capped.
- Mobile wallets, BNPL and e-commerce platforms were left to a separate review. The RBA started its Review of Payments System Regulation with an Issues Paper on 25 June 2026 (submissions closed 7 August 2026) and said it intends to publish a list of regulatory priorities by the end of 2026 and to begin further consultation on them by mid-2027.
Frequently asked questions
Do the caps apply to online payments?
Yes. The domestic caps apply to card-present and card-not-present transactions on the designated networks. Online payments may still attract higher scheme, gateway and fraud costs.
Why is commercial credit still 0.8%?
The RBA kept the commercial credit cap unchanged and removed the benchmark. If many of your customers pay with business credit cards, those payments will still cost more than consumer cards.
Will my flat rate fall automatically?
Not necessarily. A flat rate is a commercial price. Compare it with a cost-plus quote using the pricing models guide.
Sources
- Reserve Bank of Australia — Conclusions Paper, interchange fees chapter, impact and implementation (March 2026; updated 19 June 2026)
- Federal Register of Legislation — Payment Systems (Regulation) Act 1998 and RBA Standards No. 1 and No. 2 of 2016 as varied
- Australian Small Business and Family Enterprise Ombudsman — small business guidance
