Card Surcharge Ban

What businesses need to know before 1 October 2026 

What's happening

From 1 October 2026, the way Australian businesses recover the cost of accepting card payments is changing.

Businesses will no longer be able to apply a surcharge to debit, prepaid and credit card payments on designated eftpos, Mastercard and Visa networks.

For businesses that currently add a card surcharge at the point of payment, there is more to review than the wording on a payment terminal. Merchant fees still need to be paid, so businesses need to understand what those fees currently cost, whether pricing needs to change and how any adjustment could affect margins and cashflow.

If you are unsure what your business currently pays in merchant fees, First Class Accounts Ovens & Murray can help you review the figures in your bookkeeping records and merchant statements before you make changes.

Surcharging explained 

A card surcharge is an additional amount charged to a customer because they choose to pay using a particular card. Businesses have used surcharging as one way to recover some or all of the cost of accepting card payments.

As a basic example, say you order a $5 cup of coffee and pay by card. While the advertised price is $5, a 2 per cent card surcharge would add 10 cents, bringing the amount paid to $5.10.

Applying a surcharge is optional, but around 16% of Australian businesses currently collect card surcharges. What’s more, the RBA estimates that Australians pay around $1.6 billion of card surcharges every year, which is no small change. 

For a business, the percentage charged to a customer is only one part of the picture. Merchant service fees, terminal charges and other payment costs can sit across different statements and accounts. Having these expenses recorded accurately makes it easier to see the actual cost of accepting card payments and assess whether your current payment arrangement still makes sense. 

What’s changing? 

From 1 October 2026, businesses will no longer be able to apply card surcharges to debit, prepaid and credit card payments made on designated eftpos, Mastercard and Visa networks.

According to the Reserve Bank of Australia’s research, the current surcharging system is no longer working as intended. Both consumers and businesses have reported finding the rules complex and confusing, while surcharges are not always clearly disclosed.

The changes form part of a broader package of payment reforms. These include:

• Lower maximum interchange fees for domestic debit, prepaid and consumer credit card transactions from 1 October 2026.

• A new cap on interchange fees for foreign issued card transactions from 1 April 2027.

• Greater publication of fee information by card networks and large payment acquirers so businesses have more information available when comparing payment providers.

Interchange fees are one component of the cost of accepting a card payment. A reduction in the interchange cap does not necessarily mean the total merchant fee charged by a payment provider will fall by the same amount. Payment providers can also charge for transaction processing, terminal rental and other payment services.

This is one reason businesses should review their own statements and actual costs before making decisions about pricing or changing payment providers.

Does this mean that all card payment fees will go away? 

No. Businesses will continue to incur costs when customers pay by card. Payment providers may charge for processing transactions, terminal rental and other payment services, and these charges are separate from the surcharge a business may currently add to a customer’s transaction.

From 1 October 2026, businesses that currently recover those costs through card surcharges will need to decide how they will manage the expense. The RBA notes that card acceptance costs can be reflected in a business’s overall pricing. Businesses can also continue to offer discounts for particular payment methods where appropriate.

The RBA does not currently regulate surcharges on non card payment methods. Other payment methods can have different provider rules and pricing requirements, so businesses using services such as PayPal or buy now pay later should check the terms that apply to those services rather than assume the new card rules apply in the same way.

This makes a review of your payment costs useful even if your business does not currently surcharge. If merchant fees are increasing, your bookkeeping data should show what those costs are doing over time and whether they are having a material effect on margins or cashflow.

First Class Accounts Ovens & Murray can help you identify these costs in your accounts and understand what your bookkeeping data is showing before you make decisions about pricing or payment providers.

Prepare early 

Businesses that currently surcharge should review their payment arrangements before 1 October rather than waiting until the change takes effect.

A practical review can include:

• Review your most recent merchant statements. Identify the total fees you pay to accept card payments. Look beyond the headline transaction percentage and include terminal fees and other payment service charges where relevant.
• Confirm where surcharging is currently switched on. This could include payment terminals, online payment systems, invoicing software and any payment apps connected to your accounting system.
• Ask your payment provider what will change on 1 October 2026. Some providers have indicated they may disable surcharging functionality from that date, so find out whether your settings will change automatically and whether you need to take action yourself.
• Review your pricing and margins. If you currently rely on surcharges to recover card acceptance costs, work out the annual value of those costs and assess whether they need to be reflected in your overall pricing.
• Consider the cashflow impact. A relatively small payment fee can become a meaningful business expense when it is applied across a large volume of transactions. Reviewing the annual cost gives you a stronger basis for deciding how to manage it.
• Compare payment providers and plans. The RBA is introducing measures intended to make payment fees easier to compare, and there may be lower cost arrangements available that better suit your transaction mix.
• Review invoices that may be paid after 1 October. The RBA advises that if a card payment is made on or after 1 October 2026, surcharging may no longer be available even if the invoice was issued before that date. Check with your payment provider and make sure your invoicing process is ready for the change.
• Update staff procedures and customer information. Anyone taking payments should know what is changing, when it applies and what customers will see at the point of payment.

Your bookkeeping records can help with several of these decisions. First Class Accounts Ovens & Murray can help you identify merchant fees in your accounts, review how those costs are being recorded and provide the figures you need to assess pricing and cashflow before the new rules begin.

If your payment systems are connected to your accounting software, it is also worth checking that any changes to surcharging or payment settings continue to flow through correctly. A change at the checkout can create reconciliation problems if the payment system and bookkeeping records no longer match.

If you would like help reviewing your merchant fees, bookkeeping records or payment processes ahead of 1 October 2026, speak with First Class Accounts Ovens & Murray.

Frequently asked questions

When does the card surcharge ban start in Australia?

The new rules take effect from 1 October 2026 for designated eftpos, Mastercard and Visa card transactions. American Express has also decided to remove surcharging from the same date.

Will businesses still have to pay merchant fees after 1 October 2026?

Yes. Businesses will still pay the costs charged by their payment provider for accepting card transactions. The change affects the ability to add a separate card surcharge to eligible card payments. Businesses may need to review their overall pricing, merchant plan and payment provider to decide how those costs will be managed.

Can I surcharge an invoice issued before 1 October 2026 if the customer pays after that date?

The RBA advises that if the card payment is made on or after 1 October 2026, surcharging may no longer be available even where the invoice was issued earlier. Businesses should check with their payment provider and update invoicing and payment settings before the change takes effect.

Sources:

RBA removal of payment surcharges FAQs

RBA Review of Merchant Card Payment Costs and Surcharging conclusions