The Reserve Bank is reviewing the nation's payment system and has suggested removing surcharges on eftpos, Mastercard and Visa cards.
It also wants to reduce interchange fees, which businesses pay to card providers.
Speaking at a parliamentary inquiry into the big four banks, Commonwealth Bank chief executive Matt Comyn said he supported the proposal "in essence".
But he urged the RBA not to be too hasty with the changes.
"We think the process is really being compressed," he told the economics committee.
"I think that's led to perhaps some wrong assumptions and conclusions."
Mr Comyn said the plan would make payments in Australia substantially lower than anywhere else in the world, while favouring international companies.
"If you're going to try and transfer a billion dollars of revenue from an industry, taking it solely from the domestic institutions, in a way that favours international," he said.
The Commonwealth boss also played down the impacts of the government's five per cent deposit home loan scheme, which some experts argue is pushing up house prices slightly, particularly at the cheaper end of the market.
Mr Comyn said the top priority must be building more homes.
"It is very challenging for younger Australians to get access to the housing market," he said.
"Clearly boosting supply and high proportionate volume of affordable housing is the most critical aspect of that."
Westpac boss Anthony Miller also faces a grilling before the committee.
On Wednesday, ANZ's Nuno Matos and Andrew Irvine of NAB will take the hot seat.
On recent evidence, Mr Matos - the Portuguese executive who took up the role in May - might have most cause to sweat.
In September, the financial regulator asked courts to slug the Melbourne-headquartered bank with $240 million in fines for misconduct in services offered to 65,000 customers and incorrectly reporting bond trading data to the government.
ASIC chair Joe Longo said the bank had a history of non-compliance and betrayed the trust of Australia.
Despite that fine being the highest in ASIC's history, committee chair Ed Husic believes they got off lightly.
"It should have been higher," the Labor MP told AAP.
Mr Husic said while that issue would be tough, other areas could be worked through more amicably.
"At its best, the committee will provide an environment to be able to explore issues and have the back and forth between the banks and the committee," he said.
"The protection from scams and fraud, and the way in which the banks are managing that and the scams, and the way in which the scams framework will be implemented."
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