ds as a revision that changes where costs sit and who is seen to carry it. From 1 October 2026, the Reserve Bank will remove surcharges on designated eftpos, Mastercard and Visa debit, prepaid and credit cards by lifting its ban on network “no-surcharge” rules. The Bank’s case is that surcharging has outlived its purpose, no longer directing consumers toward cheaper payment methods in a market where cash is fading and fees are most of the time applied uniformly. RBA Governor Michele Bullock reinforced this, arguing that “surcharging no longer works as intended”.  After more than 18 months of consultation, the reform claims to save consumers around $1.6 billion annually, while cuts to interchange fees are projected to reduce merchant costs by about $910 million each year. The RBA has alluded that the intention is clarity, but what remains unresolved and contested is how those costs reassemble themselves once the surcharge disappears, and whether the simplicity promised at the surface holds when it filters through the system beneath. Only around 16 per cent of businesses currently surcharge, but those that do are often the ones least able to absorb additional costs. Hospitality and convenience retail are strong examples where margins are structurally thin and surcharges are a way to isolate a cost that is otherwise difficult to manage. Lambert argued the policy risks missing that distinction. “The complete ban of debit and credit surcharges without ensuring that banks and payment service providers pass on the reduction interchange is one of the biggest goals that the RBA could make,” he told Inside Retail. “This is lose-lose for both the hospitality industry and consumers… However, now it will be the small businesses that are blamed for the increase in the price of a cup of coffee.” Convenience retail at the frontline CEO of the Australian Association of Convenience Stores, Theo Foukkare, said the policy risks embedding costs more deeply rather than removing them. “The reality is simple – if retailers can’t recover the cost of expensive payment methods at the point of sale, those costs don’t disappear, they get baked into prices,” he told Inside Retail. “This decision will drive up the cost of everyday essentials (whether it’s fuel, food-to-go or groceries) and every customer will end up paying more, regardless of how they choose to pay.” The frontline includes convenience, where price sensitivity plays out in real time and even small shifts are noticed almost instantly. Foukkare argued the reform alters who ultimately pays. “Customers who are doing the right thing (paying with cash or debit) will now subsidise those using high cost credit cards and rewards programs. That is fundamentally unfair,” he said, adding that “the big winners out of this are the banks and international card companies. The losers are Australian small businesses and everyday consumers.” Payment costs do not disappear  Others see the reform as part of a broader stint. Angel Zhong, Professor in the School of Economics, Finance and Marketing at RMIT University, said the decision reflects the reality that, in a cash-light economy, surcharging “no longer works” as an effective consumer choice mechanism. “The advertised price should be the final price, reducing confusion and frustration at checkout,” she said, while cautioning that payment costs do not disappear, and will depend on how they are absorbed or passed on.  For retail, the reform lands where it always does, in the way costs move and who ends up carrying them. “We don’t know what the RBA was thinking,” said Wes Lambert, and it’s hard not to hear that there is a wider uncertainty about how those costs will settle once the surcharge disappears. The promise is simplicity, but the risk is just that, in removing one layer of friction, the policy embeds another that is less visible but more difficult to manage. Whether the outcome is a cleaner system or a more opaque one, it will depend on how businesses, banks and consumers respond once the surcharge disappears from view.