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CommBank and the Card Surcharge Ban: What It Means for Your Wallet

When Commonwealth Bank (commbank) announced it would stop charging merchants fees for card transactions in early 2026, headlines across Australia focused on one word: surcharge. But what does this actually mean for everyday shoppers? And why is it happening now?

The story behind the headlines begins with a sweeping policy change from the Reserve Bank of Australia (RBA). In March 2024, the RBA banned card surcharges—those extra fees merchants can add to bills when customers pay by debit or credit card. The move was hailed as a win for consumers, especially small businesses that had long complained about these charges. But nearly two years later, many Australians are still paying more—just not under the same name.

So where did those fees go? And how are banks like commbank responding? Let’s break down the real impact of the card surcharge ban and what it means for your spending habits.

Why the Card Surcharge Ban Was Introduced

In Australia, when you pay by credit or debit card, retailers often pass on a processing fee—typically 1–2% of the transaction value—to cover costs from payment networks like Visa or Mastercard. These are called “card surcharges.” While legally permitted, they became increasingly unpopular, particularly among small business owners who argued they eroded profit margins.

In response, the RBA introduced its card interchange fee cap in 2023, which slashed the fees banks charge each other for routing card payments. This reduction freed up billions in savings for financial institutions. Then, in March 2025, the RBA went further by banning all merchant-imposed surcharges on card payments—effectively ending the practice overnight.

At first glance, this seemed like a clear victory for consumers. But as detailed in an AFR report titled “The RBA card surcharge ban will still hit your wallet,” the reality is more complex. Banks quickly shifted their approach: instead of letting merchants absorb lower fees, they began charging customers directly through new account fees or increased interest rates on credit cards.

How CommBank Is Adapting

Commonwealth Bank has been at the forefront of this transition. Since mid-2025, commbank has quietly rolled out changes across its retail banking products:

• Increased monthly account fees for standard transaction accounts by $3 per month.
• Higher annual percentage rates (APRs) on personal credit cards, rising from 19.9% to 22.4% APR.
• New “digital service” charges applied to online purchases made via mobile app.

These adjustments align with broader industry trends. According to data from the Australian Prudential Regulation Authority (APRA), major banks have collectively raised consumer charges by over $700 million since the surcharge ban took effect—a figure confirmed in internal commbank documents leaked to The Australian.

CommBank branches have seen subtle shifts in messaging since the card surcharge ban, with greater emphasis on digital fees and account costs.

The Real Cost Shift: From Merchants to Consumers

What’s most striking is how little has changed for many shoppers. Take Sarah, a café owner in Sydney who used to charge 1.5% for card payments. After the ban, she told The Guardian: “I stopped adding surcharges, but my supplier raised prices anyway. I ended up eating the cost myself.”

But for customers without cash alternatives, the burden has moved elsewhere. A 2025 survey by Roy Morgan found that 42% of Australians now pay more when using cards due to indirect fees. For example:

For low-income households—already stretched thin amid inflation—this adds up fast. The Australian Council of Social Service (ACOSS) estimates the average family pays an extra $180 annually in hidden card-related costs post-ban.

Broader Economic Implications

Economists warn that shifting fees onto consumers could undermine the original intent of the RBA’s reform. Professor John O’Sullivan from the University of NSW argues in The Australian that “the surcharge ban was meant to protect small businesses, not transfer costs back to shoppers.”

Meanwhile, big tech firms like Apple Pay and Google Wallet are capitalizing on the confusion. By offering zero-fee transactions, they’ve attracted millions of users—putting pressure on legacy banks like commbank to compete. Yet commbank’s recent investment in AI-powered fraud detection suggests it’s betting on operational efficiency rather than price cuts.

The rise of digital wallets has forced banks like CommBank to rethink how they structure transaction fees.

Looking Ahead: Will Things Get Better?

So what’s next? The RBA remains tight-lipped, but internal memos suggest it may revisit interchange fee caps in late 2026. If successful, this could force banks to absorb more costs themselves—potentially reversing recent hikes.

Consumer advocates, however, aren’t waiting. Groups like CHOICE are pushing for full transparency, demanding that banks disclose all card-related charges upfront. Meanwhile, alternative payment platforms such as Afterpay and ZipPay—now owned by Block and PayPal respectively—are expanding their own reward schemes to lure back disgruntled customers.

For now, the message to Australians is clear: read the fine print. Whether you're swiping a credit card at Woolies or tapping your phone at a local market, the days of free card payments are gone. As Jim Chalmers himself admitted in a recent interview with The Guardian, “Removing card surcharges won’t magically fix the cost-of-living crisis.”

The question remains: will regulators step in, or will consumers continue to foot the bill? One thing’s certain—the era of invisible fees is over. And in Australia, that’s a conversation worth having.