The Reserve Bank of Australia cut credit card interchange fees by 0.5 percentage points on 1 October 2026, dropping the cap from 0.8% to 0.3% for Australian-issued consumer cards. The RBA estimated the change would save merchants A$910 million annually.
Three weeks later, only seven out of twenty card acceptance schemes have reduced their merchant fees, according to Compayr, a new comparison site from payments veteran Dougal Anderson. The rest are keeping the wholesale saving.
Westpac leads on transparency: its flat transaction fee dropped from 1.2% to 0.79% after the interchange cut. That is actual pass-through. Most providers have not moved.
The pass-through problem
Interchange is a wholesale cost between banks. Lower interchange does not automatically mean lower merchant fees unless providers choose to pass it on. The RBA will require large banks to publish their interchange pass-through from 30 January 2027, forcing visibility into how much of the A$910 million saving actually reaches merchants.
Macquarie estimates the interchange changes will reduce Australian banking-sector revenue by roughly A$900 million in 2027, about 1% to 2% of total bank earnings. That creates an incentive to retain some benefit through pricing or margin.
What this means for merchant acquiring
The reform increases pressure on merchant-acquiring businesses to demonstrate transparent pricing. Commonwealth Bank's guidance shows the complexity: consumer credit cards are now capped at 0.30%, but commercial cards remain at 0.80%, and businesses still pay acquirer, terminal, scheme and processing fees beyond interchange.
With card surcharging now banned for eftpos, Visa and Mastercard, merchants cannot separately recover these costs. That makes blended rates, settlement fees and bundled charges more visible. Merchants with high consumer credit card volumes should see the biggest benefit. Those processing commercial or foreign-issued cards (capped separately at 0.8% and 1.0%) will see less relief.
This is a competitive opening for Tyro, Square, Zeller, Stripe and Adyen to compete on clear pricing and contract flexibility. Major banks can defend through bundled banking, lending and relationship offers. Worth noting: the question is not whether headline rates have dropped, but whether savings are visible across merchant segments and card types.
Merchants now have a reason to renegotiate or switch providers. The data from 30 January will show which banks are actually passing savings through.