Australia Credit Card Surcharge Ban 2026: What It Means for Consumers & Small Business
Australians have become accustomed to seeing an extra 1%, 1.5% or sometimes more added to the bill when they tap their card at a café, restaurant, shop or other small business.
From 1 October 2026, that is about to change.
Australia is effectively ending surcharges on most everyday card payments, including eftpos, Visa and Mastercard debit, prepaid and credit cards. American Express has also announced that surcharging will no longer be permitted on its cards from the same date.
For consumers, the change sounds straightforward: the price you see should increasingly be the price you pay, without an extra card surcharge appearing when you reach the terminal.
For small businesses, however, the situation is considerably more complicated.
The cost of accepting cards isn’t disappearing.
Banks, card networks and payment providers will still charge businesses for processing payments. What is changing is the ability of businesses to separately pass that cost directly to the customer as a card surcharge.
For a business processing hundreds of thousands or even millions of dollars a year in card payments, that can represent a significant cost that needs to be recovered somewhere.
So what exactly is changing? Who wins? Who loses? Will prices simply rise instead? And what should Australian small businesses be doing before 1 October?
Here’s our guide to Australia’s 2026 card surcharge changes.
Australian Card Surcharge Changes at a Glance
Effective date: 1 October 2026
Visa debit: Surcharging ends
Visa credit: Surcharging ends
Visa prepaid: Surcharging ends
Mastercard debit: Surcharging ends
Mastercard credit: Surcharging ends
Mastercard prepaid: Surcharging ends
eftpos debit and prepaid: Surcharging ends
American Express: American Express has also decided to remove surcharging from 1 October 2026.
Weekend and public holiday surcharges: Not affected by these card-payment changes.
Booking fees and other legitimate fees: Not automatically banned by these changes.
Businesses still pay card processing fees: Yes.
Can businesses build payment costs into their prices? Yes.
Can businesses offer cash discounts? Yes.
That last point is particularly important. Australia isn’t making card processing free. Instead, the cost of accepting payments is increasingly going to become another business overhead that needs to be accounted for when setting prices.
When Does the Card Surcharge Ban Start in Australia?
The key date is: 1 October 2026.
Until then, Australia’s existing card surcharge rules continue to apply. Under the current system, businesses can generally impose a surcharge on eligible card transactions, but the surcharge cannot exceed the business’s cost of accepting that particular payment method. From 1 October, the RBA will no longer prohibit eftpos, Mastercard and Visa from imposing no-surcharge rules.
Those networks have confirmed that they will introduce those rules. This distinction sounds technical, but it is important. The RBA has changed the regulatory framework so the card networks can prohibit merchants from surcharging. Visa, Mastercard and eftpos have then decided to exercise that ability.
American Express, although not presently regulated by the RBA in the same way, has also announced that it will remove surcharging from 1 October 2026.
Why Is Australia Getting Rid of Card Surcharges?
Card surcharges weren’t introduced just to annoy us every time we tapped our card for a coffee. There was actually a sensible idea behind them.
Different ways of paying cost businesses different amounts to process. If you chose a more expensive credit card when a cheaper payment option was available, the thinking was that you should pay the extra cost rather than the business passing it on to everyone else.
It also gave consumers a reason to think about how they paid. If one card attracted a surcharge and another payment method didn’t, you could simply choose the cheaper option.
That made a lot of sense when Australians regularly carried cash and paying by card was genuinely a choice.
But that’s not really how we live anymore.
Think about the last time you bought a coffee, paid for groceries or picked up takeaway. Most of us don’t even think about the payment method. We tap a card, phone or smartwatch and walk away.
Cash has become the exception rather than the rule. According to the RBA’s 2025 Consumer Payments Survey, cash accounted for only around 15% of in-person transactions in 2025, compared with 69% in 2007.
That’s an extraordinary change in less than two decades.
The payments industry has changed as well. Many small businesses now use payment providers that charge a relatively simple percentage across card transactions. From the customer’s perspective, there’s often little practical opportunity to choose a genuinely cheaper payment method at the counter.
And that’s where the surcharge system starts to become difficult to justify.
If almost everyone is paying electronically, is paying by card really an optional extra anymore?
If a café advertises a coffee for $5 but almost every customer ends up paying $5.07 because they tap their card, you could reasonably argue that the coffee doesn’t really cost $5. It costs $5.07.
That’s essentially the problem the Reserve Bank has identified.
The original purpose of surcharging was to encourage consumers to choose cheaper payment methods. But as Australia has moved rapidly towards electronic payments, the RBA concluded that surcharging was no longer doing that job particularly effectively.
Instead, for many consumers, the surcharge has started to feel like an unavoidable extra charge added to the advertised price at the very last moment.
The new approach is therefore much simpler from the customer’s perspective: build the cost of accepting everyday payments into the price of doing business, rather than adding another percentage when the customer reaches the terminal.
Of course, there’s another side to that story.
The cost of processing the card hasn’t magically disappeared. Someone still has to pay it.
And from October 2026, for many Australian small businesses, that someone will increasingly be the business itself.
That’s where the change becomes much more complicated.
Australians Are Paying Billions in Card Surcharges
This isn’t a trivial amount of money.
The RBA estimates that Australian merchants charged approximately $1.8 billion in surcharges on designated card networks during 2024/25, with consumers bearing an estimated $1.6 billion of that amount.
The RBA estimates that around 16% of Australian merchants currently surcharge card payments.
That means most businesses already absorb payment costs within their general pricing.
But for the minority that currently surcharge, the change could be significant.
Why Consumers Have Become Frustrated With Surcharges
From a consumer’s point of view, it’s pretty easy to understand why card surcharges have become unpopular.
You walk into a café, look at the menu and see:
Coffee – $5.00
You order your coffee, tap your card and discover you’ve actually paid:
$5.08
Now, eight cents isn’t going to break the bank. Most of us probably wouldn’t even bother complaining about it.
But that’s not really the point.
What frustrates people is seeing one price and then being charged another simply because they’ve used the way most Australians now pay for everyday purchases.
And while a few cents on a coffee might not seem particularly important, the numbers start looking very different when the purchase gets bigger.
A $500 purchase with a 1.5% surcharge becomes $507.50.
Put a $2,000 payment on the same card and you’re paying an extra $30.
For larger purchases, accommodation bookings, restaurant bills, professional services or event payments, those surcharges can quickly become noticeable.
There’s also the question of whether paying by card can really be considered an optional convenience anymore.
Years ago, you might have looked at the surcharge and thought, I’ll just pay cash instead.
Today, plenty of Australians leave home without much cash at all. We pay with debit cards, credit cards, phones and smartwatches. In some situations, electronic payment is effectively the only practical option.
So when a business advertises something for $100 but the vast majority of its customers end up paying $101 or $101.50, it’s understandable that consumers start asking:
Why not just tell me the real price in the first place?
That appears to be reflected in the Reserve Bank’s research, which found strong consumer support for getting rid of card surcharges, with around three-quarters of consumers wanting surcharging to end.
Ultimately, the attraction of the new system is pretty simple.
Consumers want to know what something is going to cost before they get to the payment terminal.
If the menu says $25, the shelf says $100 or the invoice says $1,000, people increasingly expect that to be the amount they actually pay.
That’s really what this part of the reform is about: making the advertised price much closer to the final price.
Of course, there’s a catch.
The card-processing fee hasn’t disappeared. The business still has to pay it.
So while consumers may no longer see a separate 1% or 1.5% surcharge on the receipt, some of that cost may eventually find its way into the price of the coffee, meal, hotel room or service instead.
And that’s where the debate becomes much more interesting.
Does This Mean Card Payments Will Become Free for Businesses?
Absolutely not.
This is probably the most important point for small-business owners to understand.
Businesses will continue paying for payment processing.
A merchant may pay its bank, acquirer or payment service provider a percentage of each transaction or operate under another fee arrangement.
Those costs can include several components within the payment chain.
What changes is the merchant’s ability to separately recover those costs from the customer through a card surcharge.
For many businesses, payment processing therefore needs to be treated like:
- rent
- electricity
- insurance
- wages
- accounting
- software
- telecommunications
- cleaning
- merchant banking
It becomes part of the cost of selling the product.
But Card Processing Costs Are Also Being Reduced
This is the other half of the reform that sometimes gets lost in headlines about the “surcharge ban”.
The RBA isn’t simply removing surcharging and leaving merchants with exactly the same payment-cost structure.
It is simultaneously reducing interchange fee caps.
From 1 October 2026, the interchange cap for domestic-issued consumer credit card transactions acquired in Australia falls to 0.3%.
For domestic-issued debit and prepaid cards, the cap will be 8 cents per transaction or 0.16% of the transaction value, depending on the applicable fee structure.
The RBA believes smaller merchants should benefit disproportionately because small businesses have historically tended to pay interchange rates closer to the existing caps, while large businesses have often been able to negotiate lower strategic rates.
That matters.
A small café and a national supermarket chain haven’t necessarily been paying equivalent card costs.
The reforms are partly intended to reduce that disparity.
Interchange Fees Aren’t the Same as Your Merchant Fee
Small businesses need to be careful here.
If you currently pay your payment provider, say, 1.5% per transaction, don’t assume that your fee will automatically become 0.3% after October.
Interchange is only one component of the overall cost of accepting a card.
Payment service providers and acquiring banks can also have other costs and margins.
The interchange cap therefore shouldn’t be confused with the final merchant service fee appearing on your statement.
This is precisely why reviewing your payment provider will become so important.
The Small-Business Problem
This reform creates an uncomfortable reality for businesses that currently pass their card costs directly to customers.
Suppose a café has:
Annual sales: $1,000,000
and:
Card transactions: 90% of sales
That means:
$900,000 is processed through cards.
If the effective merchant processing cost were 1.4%, the annual payment cost would be:
$12,600.
If customers currently pay that cost through a surcharge, the business largely recovers it.
After 1 October, it can’t simply continue doing that for the affected cards.
The café therefore has to find that $12,600 somewhere else.
For a business operating on thin margins, $12,600 matters.
Will Small Businesses Simply Increase Their Prices?
Some will.
And the RBA explicitly recognises this possibility.
Businesses can incorporate payment costs into their overall prices in exactly the same way they incorporate rent, electricity, wages and insurance.
Instead of:
Coffee $5.00 + 1.5% card surcharge
a business might charge:
Coffee $5.10
regardless of whether the customer pays by card or cash.
For consumers who already paid the surcharge, there may be relatively little difference.
But cash-paying customers could effectively contribute towards payment costs they aren’t directly generating.
This is one of the economic trade-offs created by removing explicit surcharges.
Strategy 1: Work Out What Card Payments Actually Cost Your Business
Before increasing a single price, find out what you’re really paying.
Don’t simply look at the percentage printed on your terminal agreement.
Review at least three to six months of merchant statements.
Calculate:
Total payment processing fees ÷ total card turnover × 100
For example:
Card turnover: $100,000
Total processing costs: $1,350
Effective processing rate:
1.35%
Then break the costs down further if your provider gives you enough information.
Look at:
- debit transactions
- credit transactions
- domestic cards
- international cards
- online transactions
- terminal fees
- gateway fees
- monthly fees
- chargeback costs
- other payment fees
You cannot make a sensible pricing decision without knowing the actual number.
Strategy 2: Shop Around Before Raising Prices
This may be the biggest opportunity created by the reforms.
For years, many businesses have concentrated on the surcharge rather than the underlying merchant fee.
If the customer is paying the fee, the business has relatively little incentive to fight over a few tenths of a percentage point.
That changes once the merchant bears the cost.
Ask your existing provider:
“What will my effective merchant rate be from 1 October 2026 after the interchange changes?”
Then get competing quotes.
Don’t just compare the headline percentage.
Compare the total annual cost based on your actual transaction mix.
A difference of only 0.3 percentage points on $1 million of card turnover is:
$3,000 per year.
On $5 million:
$15,000 per year.
Payment processing should now be treated as a supplier contract worth negotiating.
Strategy 3: Ask About Least-Cost Routing
Businesses accepting contactless debit payments should also ask their provider about least-cost routing, often called LCR.
Many Australian debit cards can potentially route transactions through different networks.
Least-cost routing can allow eligible debit transactions to be processed through a lower-cost network.
The practical savings will vary depending on your provider, transaction values, payment mix and pricing plan.
Ask a very simple question:
“Is least-cost routing enabled on my account, and can you show me what it saves me?”
Don’t assume that because your terminal technically supports it you’re receiving the best possible outcome.
Strategy 4: Build Payment Costs Into Your Pricing Properly
For businesses currently surcharging, absorbing the entire cost may not be commercially realistic.
Instead, calculate what proportion genuinely needs to be recovered.
Suppose your card-processing costs after the reforms represent 1% of revenue.
You don’t necessarily have to increase every item by exactly 1%.
Pricing is more sophisticated than that.
You might:
- increase some high-demand items slightly
- leave highly price-sensitive products unchanged
- round prices sensibly
- adjust packages or bundles
- increase minimum charges
- review delivery pricing
- improve margins on optional extras
- review discounting
The objective isn’t to recreate a 1% surcharge disguised as another fee.
It’s to ensure your overall pricing generates a sustainable gross margin.
Strategy 5: Don’t Automatically Add 1.5% to Everything
This deserves particular emphasis.
If you currently charge customers a 1.5% surcharge, it doesn’t necessarily follow that every advertised price needs to rise 1.5%.
Why?
Because the RBA’s reforms are intended to reduce some merchant payment costs.
Some customers may pay cash.
Some transactions may be cheaper than others.
Your existing surcharge may not precisely match your future effective processing cost.
And your pricing strategy should consider your overall cost structure rather than blindly replacing one percentage with another.
First determine your post-reform payment costs.
Then price accordingly.
Strategy 6: Consider Offering a Cash Discount
This creates an interesting reversal.
Businesses may lose the ability to charge:
$10 + 1% if you pay by card
but the RBA says businesses can still offer discounts to encourage customers to use preferred payment methods.
That could potentially create pricing such as:
Standard price: $10
Cash price: $9.90
Whether that makes sense is another question.
Cash isn’t free for businesses.
Someone has to count it, reconcile it, secure it, bank it and deal with discrepancies.
There are also labour, security and administration costs.
For many businesses, electronic payments may still be worth the convenience even after the surcharge disappears.
Strategy 7: Review Your Entire Payment Mix
October is a good opportunity to stop treating payments as an administrative afterthought.
Look at how customers actually pay.
What percentage is:
- debit card?
- credit card?
- cash?
- online?
- mobile wallet?
- bank transfer?
- foreign card?
Also examine average transaction size.
The best payment solution for a café with an $18 average transaction isn’t necessarily the best solution for a hotel with a $600 transaction or a tradesperson collecting $5,000 invoices.
Strategy 8: Update Your POS and Online Checkout
Businesses that currently surcharge should speak to their payment and point-of-sale providers well before 1 October.
Check:
- physical EFTPOS terminals
- POS software
- online checkout
- invoices
- payment links
- booking engines
- QR ordering systems
- mobile payment systems
- accounting integrations
- customer receipts
Don’t assume every surcharge setting will magically disappear on 1 October.
Ask your providers what changes they are making and whether you need to change any settings.
Strategy 9: Review Menus, Price Lists and Signage
Hospitality businesses in particular should plan ahead.
If prices are changing, you may need to update:
- printed menus
- digital menus
- menu boards
- websites
- QR menus
- takeaway menus
- room-service menus
- function packages
- price lists
- quotes
- booking confirmations
Ideally, customers shouldn’t encounter contradictory prices across different channels.
Strategy 10: Don’t Confuse Card Surcharges With Weekend Surcharges
This is likely to cause considerable consumer confusion.
The 1 October changes relate to card payment surcharges. They do not automatically prohibit legitimate: Sunday surcharges or public holiday surcharges or other fees such as certain booking fees.
The ACCC has specifically pointed out that the changes only apply to card-payment surcharges and do not apply to hospitality weekend or public-holiday surcharges or other types of fees such as booking fees.Businesses still need to comply with Australian Consumer Law and applicable pricing disclosure requirements.
What Does the Change Mean for Cafés and Restaurants?
Hospitality could be one of the sectors where customers notice the change most.
Small cafés increasingly use payment terminals and POS systems where card surcharges are automatically added to transactions.
For businesses operating on narrow margins, simply absorbing another 1% or more of revenue isn’t necessarily trivial.
A café should therefore model:
current card turnover
current surcharge revenue
current merchant fees
expected merchant fees after October
cash percentage
average transaction value
gross margin
net profit margin
Only then should menu pricing be changed.
What Does It Mean for Hotels and Accommodation Businesses?
Accommodation businesses have another issue: transaction values can be much larger.
A 1.5% cost on a $7 coffee is around 10 cents.
On a $2,000 hotel bill it is $30.
Hotels, accommodation providers and event businesses should therefore examine their payment arrangements carefully, particularly where deposits and final balances are routinely paid by credit card.
Businesses should also review their booking engines, payment gateways and terms and conditions to ensure surcharge language is updated.
What About Wedding Venues and Event Businesses?
The same issue becomes even more pronounced with large event payments.
A $10,000 wedding instalment processed through a card at 1.5% costs:
$150.
Multiple instalments can turn payment processing into a substantial cost.
Wedding venues, caterers, photographers and other event suppliers should examine whether bank transfer remains appropriate for large invoices while cards continue to be offered where commercially necessary.
Payment options, deposit procedures and contracts should be reviewed before October.
What Does the Change Mean for Consumers?
For consumers, there are several clear advantages.
More transparent pricing
The biggest benefit is simplicity.
If something is advertised for $50, consumers should not discover at checkout that paying by an ordinary card makes it $50.75.
Easier price comparison
All-inclusive prices make it easier to compare businesses.
Fewer surprise charges
This is particularly relevant for contactless payments, where consumers may tap without focusing on the final amount.
But consumers shouldn’t assume the reform means they will magically save the entire value of today’s surcharges.
Some businesses will absorb the costs.
Some will negotiate cheaper processing.
Others will incorporate payment costs into their general prices.
The RBA itself expects businesses that currently surcharge may increase advertised prices somewhat.
Could Cash Customers End Up Worse Off?
Potentially.
This is one of the interesting consequences of the reform.
Today a business might charge:
Cash: $100
Card: $101.50
After October it might decide:
Everyone: $101
The card customer saves 50 cents.
The cash customer pays $1 more.
That is effectively a move from explicit user-pays pricing towards payment costs being distributed across the entire customer base.
However, businesses remain able to offer discounts for cash or another preferred payment method if they choose.
What Happens to Credit Card Rewards?
This is another interesting economic question.
Reward points aren’t free.
Part of the economics supporting credit-card rewards historically comes from the payments ecosystem, including interchange revenue.
The RBA’s reduction in consumer credit interchange caps could eventually influence the economics of rewards programs.
That doesn’t mean your frequent-flyer credit card is suddenly disappearing on 1 October.
But consumers shouldn’t assume payment-system reform only affects merchants.
Over time, banks may reassess card fees, reward structures, points earn rates or other benefits.
That will be worth watching.
What Happens With Foreign Cards?
Not all reforms commence simultaneously.
Most changes, including surcharge removal and domestic interchange reforms, take effect on 1 October 2026.
The new interchange cap for foreign-issued cards and some additional payment-cost transparency measures commence on 1 April 2027.
The RBA has set the foreign-card interchange cap at 1%.
This may be particularly relevant for tourism, accommodation and hospitality businesses that process substantial numbers of international cards.
What About Buy Now, Pay Later and Digital Wallets?
This is an area to watch.
The RBA’s 2024–26 review concentrated on designated card networks.
The RBA has also flagged further work examining areas including mobile wallets, three-party card networks, buy-now-pay-later services and e-commerce platforms.
Australia’s payment reforms therefore shouldn’t be viewed as finished on 1 October.
The broader payments market is continuing to evolve.
What Should Small Businesses Do Before 1 October 2026?
If your business currently accepts cards, we’d suggest using the months before October to work through the following:
- Download at least six months of merchant statements.
- Calculate your real effective card-processing percentage.
- Determine how much surcharge revenue you currently collect.
- Ask your payment provider for your expected pricing after 1 October.
- Get at least two competing merchant-services quotes.
- Ask whether least-cost routing is enabled.
- Model your expected annual payment cost after the reforms.
- Decide whether your overall prices need adjustment.
- Review cash, bank transfer and other payment options.
- Update POS and EFTPOS settings.
- Update websites and online checkout systems.
- Remove obsolete surcharge notices.
- Review invoices, contracts and terms and conditions.
- Update printed menus and price lists where necessary.
- Train staff so they can explain the change accurately to customers.
The worst strategy is simply waiting until 1 October and then discovering how much surcharge revenue has disappeared.
A Simple Small-Business Example
Consider a restaurant with:
Annual revenue: $1,500,000
Card payments: 90%
Card turnover is therefore:
$1,350,000
Suppose its post-reform effective merchant cost works out at 1.1%.
Annual processing cost:
$14,850
That is now a cost the business needs to account for.
But suppose shopping around reduces the effective rate to 0.8%.
The cost becomes:
$10,800
Saving:
$4,050 per year
That $4,050 doesn’t have to be recovered through menu prices.
That’s why negotiating payment costs should come before increasing prices.
Frequently Asked Questions
When will credit card surcharges be banned in Australia?
The new arrangements commence on 1 October 2026. Visa, Mastercard and eftpos have confirmed they will introduce no-surcharge rules from that date. American Express has also decided to remove surcharging from 1 October.
Does the change include debit cards?
Yes. The changes cover debit and prepaid cards on the designated eftpos, Mastercard and Visa networks as well as Visa and Mastercard credit cards.
Can Australian businesses still charge card surcharges until 1 October 2026?
Yes, subject to the existing rules. Until the changes commence, businesses must continue complying with Australia’s current card-surcharge requirements, including the prohibition on excessive surcharges.
Are card processing fees being abolished?
No. Businesses will continue paying costs associated with accepting card payments.
Can businesses increase their prices instead?
Businesses generally determine their own prices, subject to Australian Consumer Law and other applicable laws. Payment processing can be treated as a business cost and reflected in overall pricing.
Can a business offer a cash discount?
Yes. The RBA has specifically stated that businesses can continue offering discounts, including discounts to customers paying cash.
Are Sunday and public holiday surcharges being banned?
No. The changes concern card-payment surcharges. They do not themselves prohibit hospitality weekend or public-holiday surcharges.
Are booking fees being banned?
Not under these card-surcharge reforms. Other fees remain subject to their existing legal and consumer-law requirements.
Will prices rise after card surcharges disappear?
Some businesses that currently surcharge may increase advertised prices to recover part of their payment costs. The RBA acknowledges this possibility. However, lower interchange fees and increased competition among payment providers are intended to reduce the cost that businesses need to recover.
Will small businesses be worse off?
Not necessarily.
Around 85% of small merchants don’t currently surcharge, according to the RBA, meaning those businesses could benefit from lower interchange costs without losing surcharge revenue.
Businesses that currently surcharge face a greater adjustment because payment processing will need to be absorbed or incorporated into overall pricing.
Who will enforce the new no-surcharge rules?
An important technical point is that the no-surcharge rules will form part of the card networks’ scheme rules and merchant arrangements. The ACCC says those rules will be enforced by card networks or payment service providers rather than the ACCC.
The Bigger Question: Who Should Pay for the Convenience of Cards?
For more than two decades, Australia’s surcharge regime was built around a simple idea:
The person choosing the more expensive payment method should pay for it.
But payments have changed.
When almost everyone pays electronically, card acceptance isn’t necessarily an optional service anymore. For many businesses, it’s simply part of the infrastructure required to operate.
That’s essentially where Australia is heading.
Payment processing is increasingly being treated like electricity, rent, software or insurance: a cost of doing business that ultimately forms part of the price of the product.
For consumers, that means clearer prices and fewer surprises at checkout.
For businesses, it means payment processing deserves far more attention than it may have received in the past.
Our View
The removal of card surcharges will undoubtedly be popular with many consumers.
Nobody particularly enjoys discovering that the advertised price isn’t quite the price they actually have to pay.
But it would be wrong to portray the change as making payment costs disappear.
The cost is moving, not vanishing.
For small businesses that currently surcharge, the challenge between now and 1 October is to work out exactly where that cost should go.
The smartest response isn’t necessarily to increase every price by the amount of the old surcharge.
It is to use the reform as an opportunity to examine merchant fees, negotiate with providers, activate lower-cost routing where appropriate, understand the real cost of every payment method and then make an informed pricing decision.
For consumers, greater transparency is a positive development.
For small businesses, the next few months should be about preparation.
Because on 1 October 2026, the surcharge may disappear from the customer’s receipt.
The underlying cost of accepting the payment won’t.
This article provides general information only and should not be considered legal, financial, taxation or business advice. Payment rules and individual merchant arrangements can differ. Businesses should confirm their obligations and pricing arrangements with their payment provider and obtain professional advice where appropriate.
Last updated: 21 August 2026.
