Favouring multinationals fails Australia’s payments system

Today’s decision by the RBA to slash the funding that maintains Australia’s payments system will undermine Australia’s sovereign capabilities and advantage foreign multinationals over local companies.

“The RBA’s decision will see foreign multinationals extract an increasing share of revenue from the payments system to the long-term detriment of Australia,” ABA CEO Simon Birmingham said.

“Australian banks invested more than $2 billion building Australia’s new payments system and these deep cuts to interchange will erode their ability to fund future modernisation of this critical infrastructure,” Mr Birmingham said.

“Now is not a time to further risk the capability of taxpaying Australian companies to keep investing in Australia’s future.

“International experience shows that this reduction in interchange will not lower costs for business, it will simply shift more of the fees they pay into the pockets of multinational payments and technology companies.

“The failure to consider all parts of the payments system in today’s decision makes the RBA’s proposed broader review into the entire payments ecosystem even more urgent.

“Evidence suggests that under these changes Australian banks could receive less than half of the interchange revenue from many in-person payments, which challenges the viability of current card payment models.

“The RBA’s dismissal of concerns about Australian banks’ ability to invest in payments infrastructure necessitates consideration by government of adding a requirement for the RBA to consider the maintenance of a sovereign payments and banking capability.”

Mr Birmingham also noted that the RBA has today doubled down on its previous acknowledgement that a reduction in interchange would have other impacts on cardholders:

“Issuers could recover these costs from cardholders via higher cardholder fees or higher interest rates, or could mitigate these costs by shortening interest–free periods.” – RBA Consultation Paper (July 2025)

“Banks are extremely conscious of the pressures faced by many Australians at present, but they will now need to make individual assessments on what these changes will mean for credit card conditions into the future,” Mr Birmingham said.

“If changes flow as the RBA has foreshadowed, consumers face the possibility of higher card fees, higher rates and shorter interest-free periods. “While the ABA recognises that the abolition of card surcharging is a welcome change for many Australians, the longer-term consequences of the other decisions taken by the RBA must be urgently addressed by bringing forward the RBA’s broader review of the payments system.”