How the card surcharge ban will affect your loyalty points, card payments and possibly even your insurance.
“Your morning coffee could be cheaper”…or so Prime Minister Anthony Albanese said, in the lead up to Australia’s card surcharge ban.
The early response suggests the consequences may be more complicated.
Businesses are increasing costs to account for the additional expenses incurred in offering card solutions. Some banks have withdrawn or revised their card payment services. Even the ATO will stop accepting credit card payments from 30 November 2026.
Card surcharges may have been removed, but the cost of accepting card payments remains. And the broader effects may extend well beyond the price of your morning coffee.
Recap on the RBA card reform
The Reserve Bank of Australia banned merchants from applying card surcharges to transactions from 1 October 2026.
From this date, businesses could no longer apply surcharges to eftpos, Mastercard or Visa debit, prepaid and credit card payments. American Express, UnionPay and PayPal also elected to remove consumer surcharging from the same date, although they are not all subject to the same regulatory requirements.
A card surcharge previously allowed a business to recover some or all of the cost of accepting a card payment. These costs may include interchange fees, card scheme fees and charges imposed by the business’s bank or payment provider.
At the same time, the Reserve Bank of Australia reduced the interchange fee cap for Australian-issued consumer credit cards from 0.8% to 0.3%. Interchange fees are paid within the card payment system and have historically contributed to the revenue banks use to fund card benefits, including rewards programs.
The potential impact on businesses
For consumers, the card reform makes advertised prices clearer. For businesses, the position is more complex.
Removing the surcharge does not remove the underlying cost of processing a card payment. Bank imposed card-processing fees remain an operating cost that must now be absorbed, recovered through general pricing or managed in another way. In a society that relies heavily on contactless payments and online shopping, removing card payments isn’t a practical commercial option.
Depending on how prices are adjusted, customers could ultimately pay more than they did under the previous surcharge model, including those who pay by cash or bank transfer.
For example, a 1.5% surcharge on a $5.50 coffee previously added approximately 8.3 cents, bringing the total to $5.58. While this may seem minor on a single transaction, when absorbed by a small business, this can accumulate across thousands of transactions.
Instead of increasing individual prices by a few cents, some businesses may adopt simpler rounded prices. Your $5.50 coffee has very quickly become $6, regardless of your payment method.
Some specialist payment platforms and banks have also withdrawn or revised card payment services. This can create additional complexity for businesses that rely on dedicated invoicing, accounting or industry-specific payment systems. While the payments market adjusts, businesses may need to review alternative providers to continue offering card payments. This can include payment solutions that charge administrative fees to card payments.
It’s a difficult decision for many businesses.
Card points, perks and complimentary insurance on the decline
Since the RBA announcement, Australian banks have been making significant changes to points and perks associated with their credit card offerings.
The reduction in interchange fee caps lowers one source of revenue historically used to support card rewards. While individual product changes may reflect several commercial considerations, it’s unsurprising that cardholders are now seeing changes to rewards and benefits.
ANZ is introducing monthly spending caps for points, with Bankwest following suit – reducing the value of points once a dollar limit has been achieved per month. NAB has reduced their redemption catalogue while Commonwealth Bank has closed their existing CommBank Awards program and introduced Yello Points to select customers who meet eligibility criteria.
The most common change to bank reward programs appears to apply to Travel Insurance – with the Australian Government’s Smartraveller service warning travellers not to assume that existing credit card insurance remains unchanged. Some banks have removed cover from selected cards, shortened maximum coverage periods, and reduced insured benefits:
Commonwealth Bank has removed or reduced travel insurance benefits across certain cards. Some cards no longer have coverage for trip cancellation costs, baggage and personal goods, or extended warranty.
NAB removed international and domestic travel insurance, delay expenses and rental vehicle excess from multiple cards. Some cards have seen a reduction in cover period from 3 months to 30 consecutive days.
Westpac largely reduced their travel insurance to cover medical emergencies only, with excess rising from $300 to $500. Overseas Transit Accidental Insurance, Purchase Protection Insurance and Extended Warranty Insurance is no longer available.
ANZ will be rolling out changes in phases. From 9 December 2026, they will remove travel insurance and domestic rental vehicle excess insurance from ANZ Rewards Platinum and ANZ Rewards Black. Cards that retain travel insurance will see a reduction in cover periods. Further changes will be announced 27 March 2027.
Bankwest has removed a number of travel cover inclusions, such as extended warranty, accidental death, transit accident insurance and interstate flight inconvenience insurance.
Historically, travel insurance has been a complimentary cover that activates upon purchasing holiday related items on your card. In line with the above changes, many banks are requiring an opt-in arrangement. We recommend reviewing your credit card terms to understand if you’re covered, and the corresponding inclusions.
The safest way to travel
Don't let changes to your travel insurance catch you by surprise. Willis Temby can arrange comprehensive travel insurance, so you can travel with confidence knowing your cover has been carefully considered. Where changes to coverage occur, you will be notified.
Corporate Travel Insurance: Designed to support businesses against unexpected travel exposures, Corporate Travel Insurance provides protection for employees, directors and authorised travellers domestically and internationally. Can be structured to include travel for family members or incidental leisure travel.
Personal Travel Insurance: We partner with insure4travel to provide personal travel insurance, purchasable one a one-off or yearly basis. Subject to policy terms, benefits include worldwide cover (exclusions may apply), 24/7 emergency assistance, unlimited overseas medical expenses and unlimited cover for hundreds of sports/activities.
If you’d like to learn more about Willis Temby’s travel insurance options, contact our team on 08 9227 8233 or communications@willistemby.com.au
Payment update for Willis Temby clients
In line with RBA reforms and resulting bank changes, Willis Temby is no longer able to accept card payments via DEFT. Credit card payments are now available through ArtevaPay. Other payment options may also be available on your invoice.
If you would like further clarification, please don’t hesitate to contact our team.
Disclaimer: Information in this article was sourced from publicly available materials as at 7 October 2026. Product features, rewards programs, insurance benefits and terms may change over time. Readers should confirm current details directly with the relevant provider before relying on this information.
