Australian credit card holders are facing a significant reduction in rewards as major issuers begin devaluing points programs ahead of a landmark regulatory change. From October 1, 2026, the Reserve Bank of Australia will implement a ban on card surcharges for transactions on the eftpos, Mastercard, and Visa networks. This policy shift is designed to simplify payments and reduce costs for small businesses, but it is simultaneously disrupting the financial model that supports credit card loyalty programs.
Interchange fees—the wholesale costs paid by a merchant's bank to the card issuer—have long served as the primary funding source for credit card rewards, including sign-up bonuses, travel perks, and points-earning rates. With the Reserve Bank mandating a reduction in these fee caps, banks are now adjusting their offerings to maintain profitability. Some institutions have already begun cutting earn rates by up to 50 percent and axing premium card tiers.
For the average consumer, the immediate impact will be a decrease in the value of everyday spending. While the removal of surcharges aims to provide transparency at the checkout, the trade-off is a less generous rewards ecosystem. Industry analysts suggest that banks are pivoting their strategies, moving away from broad-based rewards toward more targeted retention offers and spend-based benefits.
Businesses are also preparing for the transition, as they will no longer be able to pass on processing costs directly to customers. Instead, these costs are expected to be absorbed into the base price of goods and services. As the October deadline approaches, consumers are encouraged to review their current card benefits and consider how these changes might affect their long-term value, as further adjustments to annual fees and reward structures are likely to continue.