The new interchange caps started 1 October 2026 — what your rate should look like now

The new interchange caps took effect on 1 October 2026, and for most small merchants the honest answer is your rate should have come down by now — but only if you ask.

Here’s what actually changed.

Credit cards: 0.80% down to 0.30%

Consumer credit card interchange is now capped at 30 basis points excluding GST, so 33 with it. That’s down from 80, or 88 including GST.

That’s a serious cut. Credit cards are about 35% of the total card market and getting smaller every year as debit takes more of it, but for the businesses carrying a lot of credit volume this is the number that matters.

Debit cards: a much smaller win

Debit is now 65% of the market and still growing, and its cap moved from 20 basis points excluding GST to 16. The cents-based cap moved too, from 10 cents to 8.

So it’s the higher of 8 cents or 16 basis points, depending on the transaction size. And I’ll tell you now — the saving there is not very much. It’s quite small. On a $4 coffee, 8 cents is the binding number and it always was.

The saving on credit is quite extreme, quite decent. The saving on debit is rounding.

Which is the first thing worth understanding: two-thirds of the market moved barely at all.

And then April 2027

Not yet, but on 1 April 2027 the interchange on foreign-issued cards comes down to a single cap of 1.0%.

Right now that rate varies all over the place depending on where the card was issued — 2.5%, 1.6%, something else again, depending on whether they’re in Southeast Asia or Europe or America. If you’re in tourism, hospitality, anywhere with a lot of overseas cards through the terminal, that one is worth more to you than the October changes.

Business cards are the exception, and they’re staying at 0.80%

This is the bit most people will miss.

Commercial credit cards did not come down. The cap on them has been retained at 0.80% — the number consumer credit has just left behind. So every business card now sits at 80 basis points, and before October there were plenty priced under that.

Worth being precise about one thing, because it’s easy to get wrong: business debit isn’t caught by this. The 8 cent or 0.16% cap covers all domestic debit and prepaid cards, commercial ones included. It’s business credit that stays high.

This isn’t new territory. New Zealand did much the same thing: they cut consumer credit and debit significantly and left business cards up high, around 1.6%.

And I think the reasoning is the same in both places. Businesses do it tough. Sometimes they need that interest-free period for working capital, so they want a card. If you drop the interchange too far, the bank can’t fund those 30 days out of the interchange it’s receiving — so it either takes the card away or starts charging properly for it. Nobody wants to do that to small business. So business cards get a break and keep working the way they do now.

Which means the banks are about to start pushing business cards hard, because 80 basis points is where all the issuing margin went.

What that does to your credit card

Think about what the bank is actually giving up here.

Twelve years ago interchange on a credit card was something like 1.6%. That’s how everyone got a card for free — the bank was making that on every dollar you spent. Then it dropped to 80 and, if you remember, suddenly you had to pay an annual fee. Overnight.

Now it’s 30.

So expect credit cards to keep the interest-free period and not much else. Points either disappear or you pay a fair whack for them, because there’s only 30 basis points funding the whole thing and with interest rates where they are there isn’t a lot of fat to hand back to the consumer.

What follows from that is a migration away from credit and into debit. I’d expect that 65% debit share to climb further, which on its own reduces the cost of acceptance for merchants over time — separate to anything the RBA did.

So who actually wins

Your high-credit businesses. The nail salon in Woollahra, the café in Toorak — anywhere the credit card percentage is high — they’re going to see real money come out of their cost of transactions.

Your mechanic in Frankston, running mostly debit, will see much less of a decrease.

Except.

Most of you won’t see a cent of it

Most merchants aren’t on interchange or cost-plus pricing. They’re on a fixed blended rate — 1.1, 1.2, 1.4, 1.5, 1.7. If you want a sense of where your industry normally lands, we’ve broken it down by what each industry actually pays.

If you’re on a blended rate, interchange coming down changes nothing on your statement. Not one basis point. The cost drops and your payments company picks up the margin.

That’s the whole problem with this. The change is going to create more margin for the payment companies, at least initially, until enough merchants look around and move. So the quicker you get onto it, the better.

Across most businesses I’d put the available saving at somewhere between 7 and 12 basis points. Doesn’t sound like much. It’s over a thousand dollars for every million dollars of turnover at the top of that range. That’s not chump change. Our fee calculator will give you a number on your own turnover and card mix.

And the margins in a lot of these businesses are high. There’s enormous complexity in how payments get priced, and if you want everyone on the same margin you end up handing the same blended rate to a mechanic and a café and a pizza shop and a hairdresser — when all of those businesses have completely different card mixes and completely different average transaction sizes, both of which drive the actual cost. So it’s very hard to say what any one business will save.

One thing is certain though: the only way you save is by comparing, and by asking your current provider for a better deal. Because you can definitely get one. Some of these payment companies — excuse the French — take the piss.

The businesses that might go backwards

Now, who loses out of this?

Business to business. If a lot of your customers are paying you on a business card, those cards are staying at 0.80% while everything else falls, and the banks are about to push them harder.

So say you’re an electrical wholesaler selling to electricians — conduit, wire, TPS cable. Your customers are trade. A lot of them are paying on a business credit card. Your costs could go up, and maybe by a fair bit.

Some of that trade goes out on account, bank to bank, and that’s fine. But if you’re the hardware store next to a building site, you’re going to cop a few fees.

What do those businesses do? It’s a genuine question and I don’t think there’s a tidy answer. Although honestly, a lot of them won’t notice and a lot more won’t know — and plenty will be on a blended rate anyway, in which case nothing changes for them either way and they may even come out ahead.

It’s complicated. It’s meant to be complicated. Which is why you want someone who reads these statements for a living to look at yours.

What a business actually does now

Pick up the phone.

The first thing is to ring your current provider and ask for a better rate. Tell them interchange has come down and you’d like that passed on. A lot of them will move, because they’d rather re-price you than lose you.

The second is to shop around, either yourself or through a broker. I’ll declare the interest straight up — I’m behind Eftpos Choice and Eftpos House, both brokers in this market. There are others. Most of them do the work for nothing, because the provider pays them. You can also just compare providers yourself and see what the panel charges.

If you’re running an integrated point of sale it’s a bit different. There’s more work involved if the POS has to move too, and a broker will usually be able to tell you quickly whether it’s worth it or not.

And check your routing while you’re at it. If least cost routing isn’t switched on, none of this saving reaches you anyway — you’ll be sending dual-network debit down the expensive rail and the cap on the cheap one won’t matter.

The short version

Since 1 October 2026 you can’t surcharge, which means the cost stops being your customer’s problem and starts being yours. It hits your bottom line directly.

At the same time the new interchange caps handed your provider a cost reduction they are under no obligation to pass on.

The UK didn’t see a big rush of merchants renegotiating when surcharging was banned there, and I suspect a lot of Australian businesses will be the same — they’ll cop it and move on. But with the cost of living where it is, every dollar saved is a dollar won.

So make a couple of calls. Get a rate. Make a change and start saving.