The End of Card Surcharges

Card Surcharges Have Ended: Your Golden Guide to Protecting Business Profit

FOCUS: What Australian businesses should know about absorbing costs, changing prices and accepting cash

Australia’s card-payment landscape changed on 1 October 2026. Most businesses can no longer add surcharges to common card payments. The change is broader than a credit card surcharge ban. It generally covers credit, debit and prepaid cards.

It also covers in-store, online and mobile-wallet transactions processed through affected networks.

The Reserve Bank of Australia enabled card networks to introduce “no-surcharge” rules. The RBA does not directly regulate individual merchants.

eftpos, Mastercard and Visa introduced these rules from 1 October 2026. American Express, JCB and UnionPay also voluntarily aligned.PayPal introduced its no-surcharge rule from 5 October 2026. Businesses should confirm individual arrangements with their payment provider.

Card-processing costs have not disappeared. Your business must now decide how those costs fit within its pricing and payment strategy.

Key Takeaways

• Most card surcharges ended on 1 October 2026 under new card-network rules.
• The change covers credit, debit, prepaid, mobile-wallet and many business card payments.
• Businesses still pay processing fees, although related reforms should reduce many costs.
• You can absorb costs, adjust prices, encourage cheaper payments, or combine these approaches.
• Cash can preserve customer choice, but it requires secure handling and complete records.
• Review real payment data before changing prices or removing a payment option.

Why did card surcharges end in Australia?

The RBA reviewed merchant card costs and surcharging. It concluded that “surcharging no longer works as intended.”

Customers increasingly rely on cards and often cannot avoid surcharges. Separate fees also make final prices harder to understand.

The RBA estimates customers paid $1.6 billion annually in surcharges on designated card networks. Around 16 per cent of merchants surcharged.

Importantly, 85 per cent of small merchants already did not surcharge. They generally included payment costs within their overall pricing.

The reforms also reduce certain fees exchanged between financial institutions. The complete package could lower wholesale merchant costs by $910 million annually.

However, those benefits are staged. Domestic interchange changes began on 1 October 2026.

Caps for foreign-issued card transactions begin on 1 April 2027. Actual savings will depend on each provider and payment plan.

Treasurer Jim Chalmers said, “People shouldn’t be punished for using a credit or debit card.”

What payments and fees are covered?

The rules target extra fees imposed because someone pays using a covered card. Renaming the charge does not make it compliant.

The rules generally apply to personal, commercial and corporate cards on affected networks. They also cover business-to-business card payments.

The payment date can matter for older invoices. A card surcharge may be unavailable after 1 October, despite an earlier invoice date.

Businesses should check outstanding invoices and automated payment links. Ask your provider how it handles these transactions.

Genuine service, booking, delivery, weekend and public holiday fees may continue. They must not arise because a customer pays by card.

These charges must still comply with Australian Consumer Law. Unavoidable fees generally need inclusion within the displayed total price.

Limited exceptions may apply where legislation or regulation expressly permits card surcharging. Taxi payments may remain subject to state or territory rules.

Option one: absorb the card-processing cost

Absorbing the cost means keeping current prices while treating card fees as another operating expense.

This approach may suit businesses with strong margins, low processing rates or relatively few card transactions.

Advantages

• Customers see no price increase.
• Pricing remains simple and competitive.
• Checkout conversations become easier.
• Lower interchange caps may reduce the effect on profit.

Disadvantages

• Each card payment reduces the business margin.
• High-volume businesses may experience a significant annual cost.
• Commercial, premium and overseas cards may cost more to accept.
• Small charges can accumulate unnoticed without regular reporting.

Start with your latest merchant statements. Calculate total card costs as a percentage of card sales, not total business sales.

Then model the annual effect on gross profit and cash flow. Even a small percentage can represent thousands of dollars.

Do not assume your provider automatically passed through every saving. Request updated pricing and compare other providers.

Option two: include processing costs in your prices

Businesses may recover card-acceptance costs through overall prices. The processing cost then becomes part of the advertised price.

For example, a $60 service with a former one per cent surcharge cost $60.60. The business could advertise $60.60 instead.

Rounding may create a cleaner price. However, any increase should reflect customer expectations and the business’s wider pricing strategy.

Advantages

• The business can protect its overall margin.
• Customers see a clearer final price.
• Pricing becomes easier to explain and administer.
• Card costs are shared across the customer base.

Disadvantages

• Cash customers may contribute towards card costs.
• Higher advertised prices could weaken competitiveness.
• A flat increase may over-recover some costs and under-recover others.
• Menus, websites, catalogues, proposals and systems may require updates.

The ACCC confirms that businesses may adjust prices. However, they must not mislead customers about the reason for an increase.

If wages, rent and supplies influenced the review, say so. Do not attribute the entire increase to card-payment reforms.

Review prices product by product where possible. Low-margin items may need attention, while stronger products may absorb their share.

A blanket increase can look shiny but hide weak pricing. Good costing shows which products are truly carrying their weight.

Option three: accept and encourage cash

Cash may reduce card transactions and preserve customer choice. A clearly disclosed cash discount can encourage customers to use it.

However, cash is not automatically free. Counting, reconciliation, banking, security and staff time all create costs.

The RBA says recent studies do not clearly show cash costs less than cards. Each business should calculate its actual costs.

Advantages

• Fewer card transactions may reduce merchant fees.
• Customers who prefer cash retain that choice.
• There is no electronic settlement delay.
• A cash discount can feel more positive than a card surcharge.

Disadvantages

• Cash can be lost, stolen or miscounted.
• Money remains outside the bank until deposited.
• Banking takes time and creates security concerns.
• Till differences and refunds require consistent procedures.
• Poor records can cause GST, income tax and audit problems.

Cash sales remain business income. They must be completely recorded and included in relevant accounting and tax reporting.

These obligations are manageable with sensible controls that protect trusted staff and the business.

Record every sale through a point-of-sale system or another reliable record-keeping system. Electronic and paper records may both be acceptable.

Reconcile recorded cash sales to cash counted and banked. Account for floats, refunds, drawings, expenses and any differences.

Bank cash regularly and use secure storage with restricted access. Separate cash counting and reconciliation reviews where practical.

Document the process so every employee follows the same steps. Conduct occasional spot checks and investigate unexplained differences promptly.

The ATO recommends accurate records for cash and electronic transactions. It also recommends regular reconciliation of cash and EFTPOS sales.

Most business records generally need retention for five years. Some records may need to be kept longer.

Option four: encourage lower-cost payment methods

Cash is not the only alternative. Bank transfer, direct debit or PayID may cost less for some businesses.

Businesses may offer a genuine discount for a preferred payment method. The discount must be clearly disclosed before ordering or payment.

The full price must remain clearly displayed. The discounted price must not appear more prominently than the full price.

This option may suit invoices, subscriptions or higher-value services. It may be less practical for busy counters or impulse purchases.

Consider fraud risks, delayed payments and reconciliation time. A lower transaction charge can still create expensive administration.

Which option is best for your business?

There is no universal winner. Many businesses will achieve the strongest result through a measured combination.

You might absorb lower debit costs, adjust selected prices and offer cash or PayID discounts. You could also negotiate provider fees.

Consider these questions:

1. What did card acceptance cost during the last twelve months?
2. Which cards and payment channels drive those costs?
3. How do customers currently pay?
4. Which products have enough margin to absorb the cost?
5. How sensitive are customers to visible price changes?
6. What would cash handling cost in time, banking and security?
7. Can another provider offer better pricing or clearer reporting?

Compare several scenarios using actual sales data. Measure the effects on profit, cash flow, administration and customer experience.

The lowest transaction rate does not always deliver the best result. Your decision should protect profitability without creating unnecessary customer friction.

Practical action checklist

• Confirm that card surcharges are disabled across terminals, invoices, websites, apps and payment links.
• Remove outdated surcharge signs, terms, templates and automated messages.
• Check mobile-wallet, online and business-to-business payment channels.
• Review older invoices awaiting payment by card.
• Request current pricing information from your payment provider.
• Calculate the annual cost of absorbing fees.
• Update prices and displays where your analysis supports a change.
• Disclose any payment discount before customers order or pay.
• Introduce written cash-handling and reconciliation procedures.
• Review the financial result after three months.

Turn the change into a golden business decision

The end of card surcharges changes how businesses recover payment costs. It does not make those costs disappear.

Reacting without reviewing the numbers could erode margins or create unnecessary price increases. A measured review can reveal a stronger path.

DJ Grigg Financial can help you understand your payment costs, pricing, margins and cash flow. We can also model your available options.

Contact us to turn this payment change into a clear, practical and golden opportunity for your business.

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Sources and further reading

• Reserve Bank of Australia — removal of card payment surcharges and implementation dates.
• Reserve Bank of Australia — conclusions, statistics and estimated merchant savings.
• Reserve Bank of Australia — expected impacts and staged implementation.
• ACCC — card surcharge guidance, price increases and payment-method discounts.
• ACCC — price-display requirements.
• Australian Payments Network — business guidance covering card types, B2B payments and exceptions.
• ATO — banking records and cash-sales reconciliation.
• ATO — business record-keeping tips.
• Treasury Ministers — Government announcement and policy statement.