The Australian Travel Industry Association (ATIA) has launched a fierce attack on the Reserve Bank of Australia’s decision to scrap credit and debit card surcharges, warning the change will shift costs onto travel businesses, push up travel prices and hand a major win to banks and card schemes.
ATIA boss Dean Long said the only players who would be “genuinely happy” with the decision were the card networks and issuing banks, arguing the policy would leave advisors, tour operators and consumers worse off from 1 October 2026, when the surcharge ban comes into effect.
“It’s not a great day, and it’s not a great policy,” Long said, as he outlined what ATIA believes will be the immediate and longer-term impact of the reforms.
Long said the removal of surcharges would not eliminate payment costs, but instead shift them back onto businesses that would need to recover those costs elsewhere, with ATIA warning this will require prices across travel to rise by at least one per cent from 1 October.
“For pretty much everybody in travel today, it will mean higher airfares,” he said, describing that outcome as the “really disappointing aspect” of the announcement.
What is the RBA actually changing?
The RBA’s reforms, published in its final conclusions paper, will remove surcharging across eftpos, Mastercard and Visa networks, while also lowering interchange fee caps and increasing transparency in payment costs. The central bank has framed the changes as a way to simplify pricing for consumers, improve competition and bring payment costs into advertised prices rather than adding them at checkout.
Most changes will take effect from 1 October 2026, with further reforms such as caps on foreign-issued cards and additional transparency measures scheduled for April 2027.
But ATIA has warned against underestimating the true cost of card acceptance, pushing back on simplified interpretations of the RBA’s figures.
“It is really complicated… you’re not just going to be charged 0.3 per cent or one per cent. Those margins are going to be much higher,” Long said.
Who’s really paying?
ATIA said travel businesses will be forced to absorb at least a one per cent cost on transactions from 1 October, arguing that while interchange fees have been reduced from 0.8 per cent to 0.3 per cent on domestic consumer cards, interchange is only one component of the total cost of accepting payments. Once scheme fees and acquirer fees are included, total payment costs in travel remain above one per cent of transaction value, with international cards sitting closer to 1.5 per cent.
Under the new framework, those costs can no longer be passed through directly. ATIA said the effect is not a removal of fees, but a redistribution of them, with travel businesses required to absorb or recover the cost elsewhere. The central question, according to ATIA, is who ultimately pays.
ATIA said travel transactions typically range from $6,400 to $10,000 and are often paid 70 to 100 days in advance, with some businesses required to hold acquirer bonds exceeding $1 million, adding further pressure to already tight margins.
Travel ticks all the risk boxes:
- High transaction values
- Heavy credit card usage
- Thin margins
That makes it harder to absorb fees compared to, say, retail or hospitality.
“This change will mean having to do a complete analysis into our service fees/mark ups/payments etc,” The Don’t Forget Travel Group director Andrew Sullivan told Karryon.
“It might even change how we accept payments or what services we offer.”
Corporate and luxury travel set to feel the impact most
Long said the impact would be uneven across the travel sector, with corporate travel management companies among the most exposed.
Corporate card acceptance, which carries a higher interchange cap of 0.8 per cent under the new arrangements, cannot easily be avoided for businesses servicing corporate clients.
“That’s going to be a really difficult couple of months for those that are running TMCs,” he said, noting those businesses would need to have “difficult conversations” with clients and suppliers about increasing service fees to cover rising payment costs.
Luxury leisure is expected to face similar pressure. High-value bookings are more likely to be paid via premium credit cards, where acceptance costs are higher and less flexible to absorb.
Geoff Currie, Luxury Travel Advisor at Luxe by itravel, told Karryon around 70 per cent of his clientele currently book using credit cards, highlighting how embedded card payments are in the premium segment and how exposed those bookings are to the change.
Why ATIA says this won’t be cost-neutral
Long said the decision “goes against all the advice from business groups that do not have a vested interest in maintaining the profit margins of those individual companies”, reinforcing ATIA’s position that the policy risks unintended consequences for both businesses and consumers.
“The RBA says this is net-neutral. There is no way it can be for travel. Interchange is only one part of what we pay. The full cost of accepting a payment in travel is well above 1% of transaction value, and that hasn’t moved. What has changed is that we can no longer recover it transparently. It will go into base prices and every customer will pay it, whether they use a credit card or not.”
“The RBA has based this decision on the belief that only 16% of businesses surcharge. We understand that this data is derived from institutions who benefit directly from this decision, and it does not reflect what Australians actually experience. If you bought a coffee today, you paid a surcharge. If you booked a flight or a holiday, you paid a surcharge. The businesses that don’t surcharge, supermarkets, pharmacies, lottery organisations, are the exception, not the rule. The 16% figure is wrong, and it has been used to justify a policy that will cost Australian consumers, and Australia’s small businesses real money.”
The RBA has also flagged further consultation in mid-2026 on whether to extend regulation to other parts of the payments ecosystem, including mobile wallets, buy now, pay later services and e-commerce platforms, signalling that broader changes to how Australians pay for travel may still be to come.
