Consumers would save $1.2 billion a year on credit and debit card fees under an ambitious Reserve Bank of Australia proposal to ban all surcharges, a plan that goes well beyond the demands of the Albanese government.

The RBA’s proposed three-pronged overhaul of the payments system, announced on Tuesday, would ban surcharges on all debit and credit transactions under the eftpos, Mastercard and Visa networks. It would also force banks to publish previously hidden fees levied on retailers.