Credit and debit card surcharges will be banned from October.

Reserve Bank Governor Michele Bullock said the changes ‘will make card payments simpler for consumers and help businesses get better value from their payment services’.

‘Surcharging no longer works as intended,’ she said. 

‘Consumers and businesses find the rules complex and confusing, surcharges are often not well disclosed, and most consumers want surcharging to stop.’

The long-awaited ban on surcharges will come into effect on October 1 and is expected to save customers an eye-watering $1.6billion each year. 

The RBA said it would lower the maximum fee that businesses can be charged when a customer pays by credit card, which are called ‘intercharge fees’. 

It will cut the cap from 0.08 per cent of the purchase amount to 0.03 per cent. 

Banks will therefore be forced to charge businesses much lower fees on credit card payments – less than half of what they could charge before. 

Credit and debit card surcharges will be banned from October 1 (stock image)

Reserve Bank governor Michele Bullock (pictured) said the changes ‘will make card payments simpler for consumers and help businesses get better value from their payment services’

An additional fee may still apply for Aussies that use American Express. 

It’s understood up to 16 per cent of businesses impose a surcharge when customers use a debit or credit card, which equates to a third in the hospitality sector. 

More to come.