Payment system reforms risk reversing years of innovation progress, warns Visa as SMB owners express concerns.
What’s happening: The RBA’s Payments System Board plans to remove card surcharges and lower interchange fee caps, potentially delivering $2.4 billion in combined annual savings to consumers and businesses. The reforms aim to simplify payments and boost competition, with the RBA estimating 90% of businesses would benefit. However, mixed reactions have emerged from the small business community.
Why this matters: The proposed changes represent the most significant shake-up to Australia’s payment system in years, affecting how millions of transactions are processed daily. With SMBs employing over 8 million Australians, understanding both the potential benefits and concerns around implementation is crucial for assessing the broader economic impact.
The Reserve Bank of Australia is proposing the most significant overhaul of the nation’s payment system in years, with reforms that could deliver $2.4 billion in combined annual savings to consumers and businesses.
The RBA’s Payments System Board has reached preliminary views to remove surcharging on eftpos, Mastercard and Visa cards, with consumers currently paying around $1.2 billion in card surcharges each year. The board argues that surcharging is no longer achieving its intended purpose of steering consumers to make more efficient payment choices, as avoiding surcharges has become harder with declining cash usage.
The proposed reforms would also lower the cap on interchange fees paid by businesses, potentially saving businesses around $1.2 billion in interchange fees annually. The RBA estimates that around 90% of Australian businesses would be better off under the proposed policies, with small businesses set to benefit most as they tend to pay fees closer to existing caps.
Additionally, the proposals would require card networks and large acquirers to publish the fees they charge, aimed at improving transparency and competition to help businesses shop around for better deals.
However, new research has revealed mixed reactions amongst Australia’s small and medium-sized business community. A study commissioned by Visa and conducted by Lonergan Research surveyed 1,000 Australian SMB leaders, finding that almost half (44%) were unaware of the RBA Review, but when informed, 80% expressed concerns about its potential impact on their operations.
“With SMBs employing over 8 million Australians, additional uncertainty and unnecessary regulation could have wide-ranging economic impacts,” said Alan Machet, Visa’s Group Country Manager for Oceania. “SMB owners are under pressure, and the RBA needs to keep working constructively with them and the wider payments ecosystem to drive both efficiencies and innovation.”
The research highlights potentially serious economic consequences if the reforms proceed without careful consideration of SMB impacts. Over one third (37%) of SMB leaders worry that credit may become more expensive, while one in four (25%) fear reduced access to credit altogether.
SMB concerns emerge
The Visa-commissioned research highlights specific concerns amongst SMB leaders about the reforms’ potential broader implications. Over one third (37%) of SMB leaders worry that credit may become more expensive, while one in four (25%) fear reduced access to credit altogether.
“With SMBs employing over 8 million Australians, additional uncertainty and unnecessary regulation could have wide-ranging economic impacts,” said Alan Machet, Visa’s Group Country Manager for Oceania. “SMB owners are under pressure, and the RBA needs to keep working constructively with them and the wider payments ecosystem to drive both efficiencies and innovation.”
Potential investment impact
The research identified potential behavioural changes if credit becomes more expensive or harder to access. According to the study, 60% of SMBs would delay or reduce investment, whilst 53% would scale back research and development activities. Additionally, 52% indicated they would reduce hiring.
These findings come as SMB leaders face multiple operational pressures. Economic conditions and uncertainty (41%), high operating costs and supply issues (37%), and financial pressures and cash flow (35%) were cited as the top challenges currently facing small business owners.
Despite these challenges, 67% of SMB leaders remain optimistic about the next 12 months, though concerns exist about additional regulatory requirements. Almost a quarter of SMBs already identify government and regulatory requirements as a significant burden.
Machet warns that Australia risks reversing years of progress in payments innovation if the reforms are not carefully calibrated. “Australia has built a reputation as a leader in digital payments, but the RBA’s current proposals could make Australia one of the most tightly regulated payments markets in the world, risking a slowdown in small business growth and stifling innovation,” he said.
“The RBA has an opportunity to strike a balance, one that protects consumers, supports SMBs, and ensures Australia remains at the forefront of secure, inclusive, world-class payments.”
The timing of these concerns is particularly significant given that almost a quarter of SMBs already identify government and regulatory requirements as a significant burden, underscoring the risk that further compliance obligations could exacerbate existing pain points.
Balanced regulation needed
The RBA invited feedback on the proposed policy options and draft standards by 26 August 2025, stating it will draw on this feedback to finalise reforms that are in the public interest in line with its objectives of a safe, competitive and efficient payments system.
In response to the regulatory environment, Visa launched a refreshed Acquirer SMB Program in May 2025, offering preferential domestic debit interchange rates to acquirers that support SMB growth. The company is calling for a balanced regulatory framework that protects SMBs from disproportionate cost increases while maintaining the security and reliability of Australia’s payment system.
The research findings suggest that whilst consumers may benefit from reduced surcharges, the broader economic impact on Australia’s small business sector requires careful consideration to avoid unintended consequences that could affect employment, investment, and innovation across the economy.
Also read:
- Let’s Talk: The top challenges facing small and medium businesses in 2023
- Australian small businesses optimistic on tech, pessimistic on funding
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