Who Controls the Market Sets the Price - Card Fees are Rising

By Frane Maroevic, Director General, International Currency Association

Across the globe, businesses are confronting a quiet but relentless squeeze: rising card payment fees. Even in markets with strong regulatory oversight, merchants find themselves caught in a cycle where the promise of lower costs remains elusive.

Australia offers a stark illustration. According to recent Reserve Bank of Australia (RBA) data, fees for processing eftpos transactions rose 10% over six months to 0.44%, while Mastercard and Visa fees increased 3.5% and 1.9% respectively up to June 2025. These increases persist despite intensified scrutiny and public debate over surcharges, challenging the assumption that competitive pressures and regulation alone drive costs down.

“Card payment surcharges should be banned for debit and credit payments,” the Reserve Bank of Australia has stated, a change expected to save consumers approximately $1.2 billion each year.

Peter Drennan, a payments analyst, notes that rising fees are not merely an Australian phenomenon. Globally, card networks and payment service providers (PSPs) have shifted much of the cost burden onto merchants, often blending credit and debit fees in opaque ways that are hard for small businesses to compare or negotiate. In Europe, for instance, despite the Payment Services Directive 2 (PSD2) and explicit caps on interchange fees, merchants still report “hidden” charges and rising processing costs in markets from Germany to Italy.

The implications are significant. Higher fees constrain small businesses’ margins, drive up consumer prices, and erode the transparency needed for truly competitive markets. Proposed interventions—such as surcharge bans, interchange fee caps, and mandatory fee disclosures—may only be effective if regulators can ensure that savings are actually passed on to businesses and consumers.

Cash remains an essential counterbalance. It is universally accepted, cost-effective, and offers merchants as well as customers full control over transaction costs. As card networks continue to extract revenue under the guise of convenience, policymakers and industry advocates must critically examine who truly benefits from digital payments and where protections for businesses can be strengthened.

The Australian case should serve as a warning and a guide. Rising card fees are not an inevitable side effect of digitalisation, but a policy and design choice. Without deliberate regulatory frameworks and robust merchant advocacy, the costs of a “cashless future” will be borne disproportionately by small businesses and consumers alike.