Australian Prime Minister Anthony Albanese said the move would help reduce the cost of living for households.

Australia has announced plans to ban surcharges on debit cards that the country’s central bank says cost consumers nearly A$1 billion ($671 million) a year.

Australia’s centre-left government said on Tuesday it would seek to ban “unfair and excessive” fees from early 2026, subject to a review of card payments by the Reserve Bank of Australia (RBA).

Australian Prime Minister Anthony Albanese said his first priority was to reduce the cost of living for households and the proposed ban would be “another step to protect Australians”.

Treasurer Jim Chalmers said the move would ensure a “better deal” for consumers and lower costs for small businesses.

“Consumers shouldn’t be punished for using cards or digital payments, and at the same time, small businesses shouldn’t have to pay high fees just to get paid themselves,” Chalmers said.

The ban would bring Australia in line with a number of other countries, including the European Union, which banned debit card surcharges in 2018.

The RBA has estimated that Australians lose A$960.26 million ($645 million) each year to surcharges, with consumers increasingly choosing to pay by card rather than cash.

The shift to cashless payments has accelerated during the COVID-19 pandemic, with the share of transactions made in cash falling from 32% to 16% between 2019 and 2022, according to RBA data.