Last updated: 25 September
From 1 October 2026, businesses can no longer add a surcharge when a customer pays by eftpos, Mastercard, Visa or American Express. You still pay merchant fees, so decide whether to raise prices, absorb the cost, discount other payment methods or stop taking cards on some channels. Remove surcharge wording from checkouts and invoices. This change applies to any business that takes card payments in store, online or against an invoice.
You can get in touch with Slate if you would like help calculating the impact of these changes and working through your options to respond.
What changes on 1 October
The Reserve Bank of Australia (RBA) regulates the card networks and in March 2026 it removed the rule that stopped the networks from banning surcharges. eftpos, Mastercard and Visa have each introduced no-surcharge rules from 1 October 2026, and American Express has decided to do the same (though it was never limited by Australia’s RBA).
Payment providers such as Square, Tyro and Eway must follow the rules of Mastercard, Visa and the other networks, so they will all switch off the surcharge function in their terminals, online checkouts and invoice payment portals from 1 October.
The ban applies to all of the following:
- debit, prepaid and credit cards on those networks
- in-store, online and invoice payments
- card payments between businesses, unless a card network’s rules provide an exemption
- invoices issued before 1 October and paid by card on or after that date
What is not affected
- Weekend surcharges, public holiday surcharges, booking fees and service fees, where they apply however the customer pays.
- Discounts for a particular payment method. You can still charge less to customers who pay by direct debit, bank transfer or cash.
- Your own card costs. You still pay your provider’s merchant fee on every card payment, and from 1 October you cannot pass it on as a separate line.
What it costs you
To work out what this could cost, multiply your annual card takings by your current surcharge rate. The result is the revenue you lose from 1 October if you change nothing else.
- A retailer taking $600,000 a year by card with a 1.5% surcharge loses $9,000 a year.
- A service business taking $20,000 a year by card with a 1.5% surcharge loses $300 a year.
To make things more difficult, it turns out the actual cost may be lower. The RBA has cut the fee your customer’s bank can take on personal credit card sales from 0.8% to 0.3%, so the rate your provider charges you could fall by up to 0.5 percentage points if it passes the saving on. Ask your provider whether it will. From 1 April 2027, merchant statements must show fees in a standard format, so you can compare providers more easily.
What to do now
1. Check every system that takes card payments
If you have not already noticed the emails coming through from your providers, confirm with each what it is switching off and when. Include POS terminals, online stores such as Shopify, card payment links on Xero or MYOB invoices, and direct debit providers that also process cards.
2. Remove surcharge wording
Remove any mention of card surcharges from signage, checkout pages, terms of trade and invoice templates.
3. Ask your provider whether your fees will fall
Ask whether the lower maximum on personal credit cards will reduce the rate you pay. If the answer is unclear, get a quote from another provider.
4. Calculate the dollar cost
Use last financial year’s card takings and your surcharge rate, as set out above. If your provider has confirmed a lower rate from 1 October, use that rate in place of your surcharge rate.
5. Decide how you’ll respond to the reduced surcharge revenue
Choose one or a combination of the following:
- Raise prices to include the card cost. This suits businesses where most customers pay by card. If you raise prices for other reasons at the same time, do not tell customers the increase is due to the surcharge ban.
- Absorb the cost where the amount is smaller than the effort of changing prices.
- Set a card-inclusive price and discount other payment methods. Raise your prices to cover card costs, then charge less to customers who pay by direct debit, bank transfer, PayID or cash. Perhaps oddly, this is allowed. Your advertised price must be the full price a card-paying customer pays, with the lower price shown as a discount from it. Tell customers about the discount before they book, order or pay, and do not show the discounted price on its own or more prominently than the full price. See the ACCC guidance on card surcharge changes.
- Stop accepting cards on some channels, such as invoices. Weigh the fees saved against slower payment and the time spent following up.
6. If you charge a retainer or recurring fee
You can raise every client’s fee to cover card costs, then give a discount to clients who pay by direct debit. For example, you could tell all clients that fees will rise by 1.5% from 1 October because card surcharges are ending, and that clients who pay by direct debit, or switch to it, will receive a discount equal to the increase. A client on $1,000 a month moves to $1,015. If they pay by card, they pay $1,015. If they pay by direct debit, they pay $1,015 less a $15 discount, which is $1,000.
Show $1,015 as the fee on the invoice and the direct debit discount as a separate line. If the increase also covers other costs, such as wages, do not say it is due to the surcharge changes.
What is still unclear
- How much of the saving providers will pass on to businesses. Providers must publish quarterly figures on this from 30 January 2027.
- Other payment methods. BNPL, PayPal and Diners Club can still carry a surcharge after 1 October 2026. The RBA has flagged a separate consultation on mobile wallets, three-party schemes such as American Express, BNPL and e-commerce platforms, so those rules may change.
- Exemptions. Each card network decides whether any exemptions apply, and each can change its rules.
Need help deciding what to do?
Contact Slate Accounts to go over your situation with an experienced CPA.
