SYDNEY, Oct 22 (Reuters) - Australia’s central bank on Friday said that buy now, pay later (BNPL) firms will no longer be able to prohibit merchants from passing-on surcharges for their services, levelling the playing field with banks and credit card providers. Following a two-year review the Reserve Bank of Australia said it was now engaging with Treasury on “regulatory approaches” to enforce its decision - a move that has been fiercely opposed by the fast-growing industry. While the central bank had previously flagged it would review the industry’s no-surcharge rule again in the near future, it noted that BNPL services tend to be quite expensive for merchants to accept and it “has now concluded that there is a public interest case for BNPL providers to remove their no-surcharge rules.” (Reporting by Paulina Duran in Sydney; Editing by Edwina Gibbs)