Card Surcharge Ban: What Australian Businesses Need to Do Now

The card surcharge ban means that from 1 October 2026, Australian businesses can no longer add a fee because a customer pays with an eftpos, Visa, Mastercard or American Express card. It covers credit, debit and prepaid cards, and it applies to businesses of every size. The price you advertise is now the price the customer pays.

Here’s the catch. The surcharge is gone, but the cost of taking cards isn’t. Your provider still takes a cut of every tap, and you now have to decide who wears it. If that feels like one more thing landing on an already full plate, you’re in good company. It’s also very fixable in an afternoon.

I’m Anja Pich, Managing Lawyer at Lawpath. I’m a commercial lawyer with more than 10 years’ experience, and I advise everyone from sole traders to national companies on contracts, pricing and commercial terms. In the weeks before the deadline, the card surcharge ban came up in almost every conversation I had. On 15 September I co-presented a webinar on it with Timothy Quinn, our Head of Tax & Accounting and a Chartered Accountant, and Martine Robins, Executive Director, Product, Pricing & Go to Market for Westpac’s Merchant Payments business. This guide is what I told attendees, what Tim added on the numbers, and the patterns my colleagues and I have seen in consultations since.

What does the card surcharge ban actually cover?

In short, the card surcharge ban stops any extra fee you add because a customer chose to pay by card. The three card networks the Reserve Bank regulates (eftpos, Mastercard and Visa) introduced “no surcharge” rules from 1 October 2026. According to the RBA’s surcharging FAQs, American Express, UnionPay and PayPal also decided to drop surcharging from the same date, even though the RBA doesn’t formally regulate them.

The way I put it to webinar attendees: the credit card surcharges are disappearing on 1 October, but the cost itself is not disappearing.

Here is the most common wrong assumption I hear: that this is a credit card thing. It isn’t. The ban applies to every debit, prepaid, eftpos and credit card, all of the above. Assume every card in your customer’s wallet is covered.

Does it apply to business customers and government?

Yes, in most cases. The RBA says business-to-business card payments aren’t exempt unless a card network’s rules or a law creates an exemption. The same goes for payments to and from government. One carve-out the RBA calls out is taxis, where surcharging stays with state and territory regulators.

If you sell goods or services with regulated prices (some utilities and licensed services, for example), you may not be able to lift your prices to cover the cost. That’s worth raising with your regulator and your lawyer now.

What about BNPL, digital wallets and non-card payments?

Digital wallets like Apple Pay and Google Pay run on the underlying card, so a Visa tapped from a phone is still a Visa. Buy now, pay later and other networks are the subject of further RBA work, so check your provider’s rules before you charge anything extra on those. The RBA doesn’t currently regulate surcharges on non-card methods like bank transfer, but Australian Consumer Law pricing rules still apply to whatever you charge.

Which fees are still allowed after the card surcharge ban?

Any fee charged for when you do the work, or for a genuine service you provide, can stay. Any fee charged because of how the customer pays has to go. The RBA confirms weekend surcharges, public holiday surcharges, booking fees and service fees sit outside the ban.

Here’s the test I ask clients to run on every fee on their price list: would the customer have paid this fee if they had used a payment method other than a card? If not, it’s a surcharge.

Tim’s version was shorter. If a fee behaves like a card surcharge, “if it quacks like a duck, it’s going to be a duck.”

Can you offer a discount for cash instead?

Yes. Tim called it “a bit of a get out of jail card.” You can advertise one all-inclusive price and then take money off for cash, direct debit or bank transfer. What you can’t do is advertise a lower price and add a fee for cards at checkout. Keep the headline number as the card price and the discount clearly described. My colleagues’ guide to multiple pricing rules explains why showing two prices for the same thing gets businesses into trouble.

Can you just raise your booking fee instead?

Be careful here. One webinar attendee asked whether they could lift a booking fee from 10% to 13%. My answer was that any increase has to reflect what the booking process actually costs you, and timing matters. If you lift your booking fee on the same day your card surcharge disappears, it looks exactly like you’re reallocating that cost.

Regulators look at what a fee does, not what it’s called. Moving the surcharge into a bigger booking fee is the kind of move that attracts attention.

Why did the RBA introduce the card surcharge ban?

Surcharging rules arrived in 2003, when cash made up around 70% of consumer payments. In 2016 surcharges were capped at the cost of acceptance. The idea throughout was to show consumers what each payment method cost so they could choose the cheaper one.

That stopped working. By 2025, cash had fallen to about 15% of payments, according to the RBA. With cash use so low, customers found surcharges hard to avoid, and many merchants applied one flat surcharge regardless of card type. Customers got no useful signal. Merchants had little reason to shop around, because the whole cost went straight to the customer. So the RBA flipped the model.

From here, the job shifts from passing card costs on to actively managing them.

How does the card surcharge ban change what you pay your provider?

Your merchant service fee should drop, but not disappear. It has three core parts: interchange (paid to the bank that issued your customer’s card), scheme fees (paid to eftpos, Mastercard and Visa for using their networks) and your provider’s margin. On top of that sit terminal and gateway fees, and any fraud prevention services. Only interchange has been cut. Scheme fees, terminal rental and your provider’s margin stay exactly where your contract puts them. Your provider’s margin is the part you can negotiate.

According to the RBA, its interchange changes should lower wholesale payment costs for merchants by around $910 million a year. Here’s what changed:

Two things jump out. If your customers mostly pay with business credit cards, your interchange saving is close to nil. And if you’re a hotel, tour operator or anyone serving lots of overseas visitors, the bigger saving won’t arrive until April. Overseas cards make up a small share of Australian transactions but a large share of interchange paid, so tourism-heavy businesses should plan for two rounds of repricing.

Will your provider actually pass the savings on?

That depends on your pricing plan. On an “interchange plus” or cost-plus plan, the lower interchange flows through automatically. On a flat or blended rate (one percentage for everything), your provider decides when and how much to pass on. Nothing in the reforms forces a flat-rate provider to cut your rate on 1 October.

Tim’s honest read of most small business owners was this:

“I genuinely think most people just see the final percentage that comes out the back.”

If that’s you, now is the time to find out which plan you’re on. Ask about least cost routing too. It sends dual-network debit card payments through the cheapest network, which is usually eftpos, and on a cost-plus plan the saving comes straight to you.

Questions to ask your payment provider this week

• What is my cost of acceptance by card type, and what was my all-in cost over the last 12 months?
• Am I on a flat rate or an interchange plus plan, and which suits my card mix after the changes?
• What is my new rate from 1 October 2026, and what changes again on 1 April 2027?
• Is least cost routing switched on, and would it save me money at my average transaction size?
• What am I paying in terminal and gateway fees? These sit outside the interchange changes.
• When exactly did surcharging stop on my terminals, and does my POS, shopping cart or gateway need a separate change?

Vague answers? Shop around. Tim’s advice was not to let your provider sidestep the spirit of a reform designed to increase competition. Transparency is on your side too. From 1 October, card schemes and large acquirers publish their fees, and from 1 April 2027 merchant statements get expanded, standardised detail that makes comparing providers easier.

Should you absorb the cost or raise your prices?

Neither answer is right for everyone. It depends on your margins and how price-sensitive your customers are. Tim’s workable answer: negotiate your merchant rate down first, then decide how much of what’s left you actually need to recover. Tim was clear about the one wrong approach:

“Don’t go and just, you know, lick your finger, put it in the air, and see what happens.”

Absorbing works if your margins are healthy and card fees are a small line on your P&L. Repricing makes sense when margins are tight, which for most businesses right now they are. You can lift everything by the same small percentage, or go line by line and raise prices where customers are least likely to notice.

Tim also made a point worth sitting with. When costs outside your control rise, customers tend to accept small price changes. If your margins are already squeezed, this is a reasonable moment to get ahead of it and explain why.

A worked example

Here’s the webinar example, extended. Say you take $500,000 a year in card payments and your cost of acceptance is 1%, or $5,000. You were surcharging, so customers covered all of it. From 1 October, that $5,000 is yours.

Now say your provider’s new all-in rate is 0.85% (an illustrative number; get your real one). Your gap is $4,250, not $5,000. This is the point I keep making to clients. Don’t assume that because you’ve been charging customers 1.5% for card payments, you now need to make up 1.5%. It could be less.

One more wrinkle if you’re registered for GST. One-eleventh of any price rise on a taxable sale goes to the ATO. So a 1% rise on GST-inclusive prices only adds about 0.91% to your revenue. Run your numbers on GST-exclusive figures, or you’ll recover less than you think.

Where you start from matters as well. If you surcharged at cost, removing it is margin-neutral only if you reprice by the same amount. If you surcharged below cost, you were already absorbing part of it, so your gap is smaller than it looks. If you never surcharged, the interchange cuts are pure upside, so ask your provider what you’ll save.

And one trap Tim flagged that catches people out: repricing spreads the cost across every customer, not just the ones who paid by card. If cards make up most of your sales, that’s close to neutral. If a big share of customers pay by bank transfer or cash, a full across-the-board rise recovers more than you lost, from people who never triggered the fee. That’s a pricing choice, not a compliance problem, but make it deliberately.

How to work out your real number

1. Total your surcharge revenue for the last 12 months.
2. Total your merchant service fees for the same period, from your statements or the merchant fees line in Xero or MYOB.
3. Get your new rate from your provider and apply it to last year’s card sales.
4. Subtract to find your gap, then compare it to your net profit.
5. Decide: absorb, reprice everything, or reprice selectively (lower-margin lines only). Then put a date on it.

A dedicated accountant can model this with you in one call. Bring the spreadsheet and you’ll get far more out of it.

Where is old surcharge wording hiding in your business?

Everywhere you didn’t think to look. Most providers switched surcharging off on their terminals during September. That’s the easy part. What worries me is everything else: the risk sits in the automated stuff that keeps running in the background without anybody checking it.

Rather than working from memory, I suggest one question: where does the phrase “card surcharge” or “card fee” appear in anything your business produces or touches? Then go and search for it.

Xero has said it will stop surcharges automatically on invoices it controls from 1 October, including unpaid ones already issued. That helps, but it doesn’t cover custom line items you built yourself, or anything outside Xero. Tim said it plainly: “That doesn’t let you off the hook.”

How to rewrite a surcharge clause

Deleting the old line is the minimum. I recommend going one step further and saying clearly that no fee applies. For example:

• Before: “A surcharge of 1.5% applies to all payments made by credit card.”
• After: “We accept payment by card, bank transfer and direct debit. No additional fee applies for paying by card.”

Want to steer customers to cheaper methods? Add a separate, genuine discount: “Pay by bank transfer and receive 2% off.” If your website terms and conditions or your services agreement still carry old payment wording, updating from a current template is faster than patching.

Tim had one more tip, and I agree with it: don’t paste your contracts into ChatGPT and assume it’ll catch what matters. “Talk to a human being that knows what they’re looking for.” Take a photo of your signage while you’re at it and ask your lawyer whether it passes.

What happens to quotes, invoices and deposits that straddle 1 October?

It comes down to the payment date, not the invoice date. The RBA confirms that if a card payment happens on or after 1 October 2026, surcharging may no longer be available even if you issued the invoice earlier. In short, anything paid after 1 October can’t carry a card surcharge.

That means:

• Open quotes that haven’t been accepted should be reissued without the surcharge.
• If a customer paid a deposit before 1 October and pays the balance after, the balance can’t carry a card surcharge.
• Overdue invoices with a surcharge line need reissuing or crediting before the customer pays by card.

How much notice do you need to give before raising prices?

It depends on how your customers buy from you. For walk-in and one-off sales (cafes, shops, online stores), my answer is simple: update your menu, website or price list and that’s your new price. No notice needed.

For ongoing customers on written terms (subscriptions, retainers, memberships), check your agreement. There’s usually a price review or variation clause setting out the notice period. Fourteen days is common, but your contract is the rule, not the average. Direct debit arrangements have their own notice rules too, which we cover below. If your terms don’t have a clear variation clause, fix that now. Lawpath’s explainer on unfair contract terms covers why a one-sided variation clause in a standard form contract can backfire.

What should your team say at the counter?

Your staff will field the questions, so give them one line and make sure everyone uses it. For me this is about trust. If a customer gets three different explanations from three different staff members, they’ll assume you don’t know what’s going on, or that you’re hiding something. That costs more than any surcharge.

A script that works: “The card fee’s gone because businesses aren’t allowed to charge them anymore. Our prices haven’t changed.” If your prices have changed, say so: “We’ve adjusted our pricing to reflect that.” Check the signage has actually come down, and tell staff when surcharging stops on your terminals, give them the updated price list and tell them who to escalate curly questions to.

What changes in your books and BAS?

Your surcharge revenue line should drop to zero. Tim’s check is a good one to diarise:

“If you’re reviewing your books on the 4th of October and there’s still a surcharge revenue line in there, you need to do something.”

Some September income landing late is fine. Anything dated after 1 October isn’t.

Because the change lands on 1 October, in the middle of a quarter, expect your BAS and October margin reports to look odd next to earlier periods. Rebase your margin reporting so October reads correctly, and leave merchant fees where they are, as that expense stays.

Other things will shift too. If you reprice, your sales figures and GST collected rise slightly. On the cost side, GST treatment of payment fees depends on the provider and the fee, so check your statement rather than assuming. Xero’s own Stripe pricing, for example, is quoted GST-inclusive. And the flip side of the card surcharge ban is that suppliers can’t surcharge you either. If you’ve been coding supplier card surcharges to bank fees, those lines should disappear from your bills.

What I’m seeing in consultations

As the deadline approached, the card surcharge ban turned up in a steady stream of legal and accounting consultations, mine and my colleagues’. A few patterns stood out.

The surcharge hides in the terms, not just the terminal. In website terms reviews, we’ve found card surcharge clauses tucked into booking and payment sections that owners had forgotten were there. The payment authorisation checkbox is a related trap. If the wording tells customers they’re agreeing to a card fee, it now describes a process that no longer exists.

Membership businesses mix up two separate problems. With gyms and membership businesses, I keep seeing owners treat “we lost our surcharge” and “we need to raise fees” as one issue. I separate them. The card cost goes into the advertised price. The fee increase runs through the existing variation clause, with written notice at least 14 days before the first higher direct debit. If the terms give members a penalty-free exit for detrimental changes, the notice needs to offer it.

Almost nobody knows their true card costs. Tim and our accounting team see merchant fees buried inside net payouts from Stripe, Square and Zeller, which makes the real cost hard to see. Setting up a clearing account that records the gross sale, the fee and the net payout separately fixes this, and it’s the fastest way to get the number you need for the absorb-or-reprice decision.

Direct debit isn’t always a bank transfer. In the webinar, a gym owner asked about direct debit. Tim’s answer applies widely: direct debit can run from a bank account or a card, and the card version is covered by the ban. If you surcharge direct debits, get advice on which rails your payments use.

Card surcharge ban checklist

1. Confirm with your provider that surcharging is switched off on terminals and online checkouts.
2. Search every template, platform and document for “surcharge” and “card fee”.
3. Rewrite payment clauses to say no card fee applies.
4. Reissue open quotes and any unpaid invoices that carry a surcharge.
5. Work out your true cost of acceptance and your new rate.
6. Decide whether to absorb, reprice everything or reprice selectively.
7. Give any contractual notice before new prices take effect for ongoing customers.
8. Brief your staff with one consistent line.
9. Check your books after 1 October for stray surcharge revenue.
10. Diarise 1 April 2027 to review your rates again when foreign card caps start.

Frequently asked questions

When does the card surcharge ban start?

The card surcharge ban started on 1 October 2026. From that date, you can’t add a fee for payments on eftpos, Visa, Mastercard or American Express cards. Many providers switched surcharging off on terminals during September, so yours may already be off.

Does the card surcharge ban apply to debit cards?

Yes. The ban covers credit, debit and prepaid cards on eftpos, Visa and Mastercard. American Express, UnionPay and PayPal have also removed surcharging from the same date. Treat every card your customers carry as covered.

Can I still charge a public holiday or weekend surcharge?

Yes. Weekend and public holiday surcharges are outside the ban because they reflect when the work happens, not how the customer pays. They still need to meet Australian Consumer Law pricing and display rules.

Can I call it a processing fee instead?

No. Regulators look at what a fee does, not its label. If a customer paying by bank transfer wouldn’t pay it, it’s a card surcharge, whatever you call it.

Can I offer a discount for paying cash?

Yes. You can advertise one all-inclusive price and offer a discount for cash, bank transfer or PayID. You can’t advertise a lower price and then add a fee for paying by card.

Can I still pass on my card fees?

Yes, through your prices. You can build card acceptance costs into what you charge. You just can’t show them as a separate card fee. Work out your new rate first, as your gap will likely be smaller than your old surcharge.

What if I issued an invoice before 1 October but the customer pays after?

It depends on the payment date. If the customer pays by card on or after 1 October 2026, you can’t apply the surcharge, even on an older invoice. Reissue or credit the surcharge line before they pay.

Does the ban apply to business-to-business payments?

Generally yes. The RBA says B2B card payments aren’t exempt unless a card network’s rules or a law provides an exemption. Government payments are treated the same way.

How much notice do I need to give before raising prices?

For walk-in or one-off sales, none. Update your prices and they apply. For customers on written agreements, follow the variation or price review clause in your contract. Fourteen days is common but not universal.

Will my merchant fees go down?

They should. Interchange caps fell on 1 October 2026, and foreign card caps start on 1 April 2027. How much you save depends on your plan and card mix. On a flat rate, your provider decides how much to pass on, so ask.

You’re not behind

If you’re reading this on or after 1 October and your signage still mentions a card fee, don’t panic. Most businesses I speak to are in the same spot, and the fix is a few hours of searching and editing, not a rebuild. The ones who run into trouble are the ones who assume the terminal handled everything. You’ve already done the hard part by working out what needs checking.

For the official detail, the ACCC’s card surcharge guidance and the Small Business Ombudsman’s card surcharging ban page are both worth a bookmark.

Want a lawyer to check your terms, quotes and signage in one go? Get unlimited legal advice with the Legal Advice Plan and book your first call today.

About the author: Anja Pich is a commercial lawyer and the Managing Lawyer at Lawpath, with more than 10 years’ experience across legal consultancy and practice. She advises businesses of every size, from first-time founders to established companies, on contracts, commercial terms and pricing, and co-presented Lawpath’s September 2026 webinar on the card surcharge ban.