Card payment surcharges banned as of 1 October 2026
If you’ve been adding a surcharge to customer card payments to cover merchant fees in your business, that line item on the receipt is about to disappear.
Beginning Thursday 1 October 2026, surcharging customers for using physical or digital card payments as their payment method will now be banned across Australia.
It’s a huge change for the businesses that choose to add a card surcharge to their transactions and it’s landing fast. Here’s what it means for your business, what to do to get ready for the ban and how to make sure the cost doesn’t quietly eat into your margin.
So what’s actually changing?
From 1 October 2026, it will be illegal to charge or pass on a surcharge to a customer who chooses to pay with a physical or digital credit or debit card: This includes EFTPOS, Visa and/or Mastercard payments. Although not regulated by the RBA, American Express has also chosen to follow suit.
The ban applies whether the payment is made at the counter, online, over the phone or on an invoice.
At the same time, the wholesale cost of accepting cards is coming down. “Interchange” fees charged by banks behind the scenes are being capped at a lower rate by the RBA, and some major financial institutions, like the Commonwealth Bank, will also lower their merchant service fees:
Interchange Fee Changes in 2026
| Card type | Old cap | New cap from 1 Oct |
|---|---|---|
| Personal credit cards | 0.8% | 0.3% |
| Debit and prepaid | 0.2% or 10c | 0.16% or 8c |
| Business/corporate credit cards | 0.8% | 0.8% (no change) |
What the surcharge ban means for your business
In plain terms, the cost of providing card payment options will now become a regular cost of doing business, like paying your rent or electricity bill. The merchant fee that your card payment provider charges will now likely need to be built into your pricing, as the ban will prohibit any business from adding them on to the end of a transaction.
If you’ve never surcharged (some businesses don’t), not much changes for you, and you may even see your merchant and interchange fees drop.
If you do surcharge, you’re about to start absorbing a cost you’ve probably long been recovering. For example, a café putting $300,000 a year through card payments with a 1.5% surcharge has been recovering around $4,500 in card fees a year. From 1 October, that money will be an expense and businesses may need to start recovering it from somewhere else.
What to do before October 1
Turn off surcharging
A lot of systems won’t do this automatically. Make sure you check your EFTPOS terminals, online checkout, booking system, invoicing software (Xero, MYOB, etc.), “pay by link” tools and any other platforms or services your business uses to accept card payments.
Update your signage and wording
Take down any “card surcharge applies” signs, check and update your menus, website, quotes, invoice templates, contracts and terms of trade.
Watch out for old invoices
If you sent an invoice in September with a surcharge built in, but the customer pays by card on or after 1 October, you generally won’t be able to charge the surcharge. You may wish to consider reissuing outstanding invoices without it.
Call your payment provider
Ask your payment provider directly: “What will my rates and fees be from 1 October, will my merchant fee reduce and will the interchange cuts apply to me?” Get their answer in writing if you can.
How to recover the new cost
Carefully review your pricing
The RBA believes that card costs should sit in your sticker price. For most businesses, that means a small, considered price rise. Here are a few ways you can recover the cost of card payment processing fees in your business:
Work out your real costs first: Divide your total merchant fees for the last 12 months by your total card turnover. That’s your effective rate, and you’ll probably find it’s slightly lower than the surcharge you were charging.
Don’t increase every item or service by the same amount: Many businesses will opt to spread the increase across low-cost, higher-margin items (a $4.70 coffee becoming $4.80 barely registers to customers) or round their prices to whole dollar amounts.
Target the items people don’t price compare: Add-ons, extras and specialty items are usually a better place to adjust pricing than your “hero” products or services, where a price hike will be more noticeable.
Time the increase sensibly: Rolling the change in with your next scheduled price review, new menu or new year will feel less abrupt for customers and clients than an immediate jump on 1 October.
Don’t forget to add GST: Your new price is GST-inclusive, so factor that in when you’re working out how much you need to increase your prices by.
Shop around for a cheaper card payment processor
This is where many businesses can claw back some or most of their lost margin:
- Check whether you’re on a flat rate or a “cost plus” plan: Cost plus (interchange plus margin) plans pass the new lower interchange caps straight through to you. Flat rate plans (e.g. 1.4% on everything) only get cheaper if your provider chooses to drop the rate.
- Get two or three quotes: Compare the total cost, including terminal rental, monthly fees and minimums, not just the headline percentage.
- Ask about least-cost routing: For contactless debit cards, this sends the payment through the cheapest network (often EFTPOS) automatically. If it’s not switched on, ask for it.
- Look for hidden fees: Terminal rental fees on machines you barely use, chargeback fees and monthly minimums can add up quickly and eat into your margins.
Encourage cheaper payment methods (the right way)
You can’t charge more for card payments, but you can still reward customers who pay another way. Discounts for cash, direct debit, bank transfer or PayID are allowed, and a small cash or bank transfer discount can go a long way.
Just make sure your pricing is displayed clearly and the incentive is genuinely a discount off your normal price. The ACCC takes a dim view of anything that looks like a surcharge in disguise.
FAQs
Can I still charge a weekend or public holiday surcharge? Yes. The ban only covers surcharges incurred as a result of paying with card. Weekend, public holiday, booking and service fees aren’t affected.
Does it apply to business-to-business payments? Yes, unless a card network specifically allows an exemption. Don’t assume your B2B invoices are safe.
We’re a not-for-profit. Are we exempt? No. Charities and NFPs are bound by the new rule the same as any other business.
What about PayPal, Afterpay or other payment types? Some other providers have also announced they’ll stop allowing surcharges. Check the individual rules for each payment option you offer.
Will this affect my credit card rewards? Likely. Lower interchange means banks earn less from cards. When caps were last cut in 2017, many banks reduced points earned rates. It’s worth reviewing whether your business card’s annual fee is still worthwhile.
While I be penalised for not following the new rule straight away? The ban is enforced through the card network rules and your payment provider, so you could face issues with your merchant facility. Some providers are simply switching off surcharging immediately from 1 October, so you likely won’t even have the option to make a mistake. Be sure to check all of your payment providers and ensure no surcharges have slipped through the cracks.
What do I do now?
The surcharge ban might be a major change, but it isn’t the end of your business as you know it. It does, however, need your careful attention. Remember to switch off your card surcharges, check your new interchange and merchant fees and make a considered review of your pricing.
Need help working out your new costs, forecasting cashflow or reviewing your margins before the new rules kick in? Get in touch with our expert business accountants today.
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The material and contents provided in this publication are general and informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
