Key Takeaways
- Australia’s new card surcharge rules take effect from 1 October 2026.
- Businesses will no longer be able to add card payment surcharges for Visa, Mastercard and eftpos transactions.
- American Express has also decided to remove surcharging from 1 October 2026.
- Businesses will still have payment processing costs after surcharges disappear.
- Some businesses may incorporate those costs into their normal product or service prices.
- Consumers may therefore see higher displayed prices at some businesses, even though the separate checkout surcharge disappears.
- Businesses can still offer discounts for certain payment methods, such as cash or PayID, provided pricing is displayed correctly.
- Weekend and public holiday hospitality surcharges are not affected by the card surcharge changes.
- Businesses should review pricing, payment processing arrangements and payment terminals before October 1.
- The change creates an opportunity for businesses to review their overall pricing and profitability rather than simply replacing the old surcharge with a higher headline price.
Main Text Content
Australia’s card surcharge rules are changing
Australians are about to see a major change in the way businesses charge for card payments.
From 1 October 2026, businesses will no longer be able to apply separate card payment surcharges to transactions made through Visa, Mastercard and eftpos. American Express has also announced that it will remove surcharging from the same date.
The changes follow the Reserve Bank of Australia’s review of merchant card payment costs and surcharging. The RBA concluded that the existing surcharge system had become increasingly complex and difficult for consumers and businesses to understand.
For consumers, the most noticeable difference will be at the checkout. Instead of seeing a listed price followed by an additional card surcharge, the displayed price should generally represent the amount they pay.
However, this does not necessarily mean the overall cost of goods and services will fall.
Why prices could increase
Businesses do not stop paying payment processing costs simply because they can no longer pass those costs on as a separate surcharge.
Every time a customer pays by card, the business may still incur costs associated with processing the transaction. Under the new rules, businesses will generally need to account for those costs as part of their overall pricing rather than adding a separate card surcharge.
The ACCC confirms that businesses can incorporate card payment costs into their overall prices. Businesses are generally free to set or change their prices, provided they do not mislead consumers about pricing or the reasons for price changes.
This means a business that previously charged a 1% card surcharge could decide to increase its standard prices to account for some or all of its payment processing costs.
For example, a business selling a service for $100 may currently charge $100 to customers paying by certain methods and $101 to customers paying by card.
From October 1, the business cannot simply add that extra $1 as a card surcharge. Instead, it could potentially set a standard price that reflects its overall costs.
The result is that customers who previously paid without a surcharge may notice a higher advertised price, while customers who previously paid the surcharge may pay a similar overall amount.
The RBA has specifically noted that businesses that currently surcharge may choose to incorporate payment costs into their sticker prices. It expects that some displayed prices could increase slightly, although consumers who already paid a surcharge may pay similar overall amounts.
The surcharge is disappearing, but the cost of accepting cards remains
This distinction is important for both consumers and business owners.
The new rules do not make card payments free for businesses.
Payment providers can still charge businesses for providing payment processing services. Businesses may also have costs associated with terminals, processing, gateways and other payment-related services.
What changes is who absorbs those costs and how they are reflected in pricing.
Previously, a business could pass an eligible card payment cost directly to the customer through a surcharge.
From October 1, businesses covered by the new no-surcharge rules will need to consider those costs within their broader pricing structure.
For small businesses in particular, this could make pricing decisions more important.
The ACCC notes that small businesses generally face higher card processing costs than larger businesses. Its published data shows that processing costs can vary significantly depending on business size, payment method, technology and pricing arrangements.
What businesses should do before October 1
Australian businesses that currently charge card surcharges should not wait until the final day to make changes.
The ACCC recommends that businesses review their pricing, update customer-facing materials and speak with their payment service provider about changes required to payment terminals and systems.
There are several areas businesses should review.
Review current payment processing costs
Business owners should understand exactly how much they are currently paying to accept different payment types.
This can include transaction fees, terminal costs, gateway fees and other payment-related charges.
Understanding the actual cost is important because the business needs to know what impact removing the surcharge could have on its margins.
Review pricing and profit margins
The removal of a surcharge provides an opportunity to review the entire pricing structure.
Rather than simply adding the previous surcharge percentage to every product, businesses should consider their full cost base.
For example, a business may have experienced changes in wages, rent, insurance, materials, supplier costs, and other operating expenses at the same time as payment costs changed.
A pricing review can help determine whether prices are still appropriate based on the business’s total costs and desired profit margin.
Check payment terminals and software
Businesses should also check how the surcharge is currently applied.
The RBA says many payment service providers intend to remove surcharge functionality from terminals around October 1. Businesses should contact their payment provider to understand what will happen to their specific systems.
This is particularly important for businesses that use multiple payment terminals, online checkout systems, point-of-sale software, or integrated accounting systems.
Update menus, websites and price lists
If a business currently displays wording such as “1.5% card surcharge” or “credit card surcharge applies”, this information may need to be removed or updated.
Businesses should review:
- Menus
- Websites
- Online stores
- Booking systems
- Point-of-sale displays
- Price lists
- Invoices
- Signage
- Customer terms and conditions
- Payment terminal settings
The ACCC specifically advises businesses to remove card surcharge notices and ensure surcharging is disabled in payment systems when the new rules take effect.
Can businesses simply add the surcharge to their prices?
Businesses can incorporate card payment costs into their overall prices, but there is an important distinction between legitimate pricing changes and misleading customers.
The ACCC gives an example of a hair salon that charges $60 for a haircut and currently applies for a 1% credit card surcharge. The salon could incorporate the payment cost into its overall price, resulting in a price of $60.60.
However, if the salon also increases the price to $65 because of other rising costs such as labour and energy, it cannot misleadingly tell customers that the entire increase was caused by the removal of card surcharging.
For businesses, this means pricing communication matters.
A business should be able to explain its prices accurately and avoid presenting unrelated cost increases as being solely caused by the surcharge changes.
Can businesses still offer cash discounts?
Yes.
The end of card surcharges does not mean businesses must charge exactly the same price regardless of payment method.
The ACCC says businesses can offer discounts to customers who use particular payment methods, including cash or PayID.
However, those discounts need to be clearly disclosed before the customer chooses to book, order, or pay. The displayed price should also be the full price payable by customers who do not receive the payment method discount.
This means businesses may still choose to encourage lower-cost payment methods through appropriately structured discounts.
For example, a business could potentially display its standard price and separately explain an eligible discount for customers paying through a particular method.
The important point is that businesses should not simply rename a card surcharge as an “administration fee”, “handling fee” or another charge if it is effectively a surcharge for paying by card. The ACCC warns that attempting to avoid the new rules in this way may constitute misleading conduct.
What does this mean for consumers?
For consumers, one of the biggest changes should be greater certainty about the final price.
Under the new system, customers should generally no longer have to calculate an additional card surcharge when paying with covered cards.
The RBA says the sticker price will become the amount consumers pay when card surcharging ends.
This may make everyday transactions easier to understand.
However, consumers should not assume that the removal of a separate surcharge automatically means everything will become cheaper.
If a business previously passed card costs directly to customers, it may decide to incorporate those costs into its general pricing.
That means the cost may become less visible rather than disappearing entirely.
Will every business increase its prices?
No.
The surcharge changes do not require every business to increase its prices.
Businesses will make their own pricing decisions based on their costs, competition, margins, and commercial strategy.
Some businesses may absorb payment processing costs.
Others may adjust their prices.
Some may review their payment providers and negotiate lower processing costs.
The RBA’s reforms also include reductions in certain interchange fee caps and measures intended to help businesses reduce payment costs. The RBA says these changes should help lower card payment costs, particularly for small businesses that tend to face higher payment costs.
This means the impact will vary from business to business.
What about hospitality surcharges?
The card surcharge changes should not be confused with other types of surcharges.
The RBA’s changes relate specifically to surcharges applied because a customer pays by card.
Hospitality businesses can continue to apply weekend and public holiday surcharges, subject to the existing rules that apply to those charges.
Booking fees, service fees and other charges that are not specifically card payment surcharges are also not automatically prohibited by the October 1 changes.
Businesses still need to make sure those fees are disclosed and displayed in accordance with Australian Consumer Law requirements.
The importance of reviewing cash flow and profitability
For business owners, the card surcharge change is ultimately a pricing and profitability issue.
A business that processes thousands of card transactions each month may see a meaningful change in its cost structure when the surcharge disappears.
For example, a retailer with high transaction volumes may need to determine whether absorbing payment costs would reduce its gross margin or whether those costs need to be reflected in its pricing.
At the same time, increasing prices without understanding customer demand could affect sales volumes.
This is why businesses should look at more than the surcharge percentage.
A proper review should consider:
- Revenue
- Gross profit margins
- Payment processing costs
- Supplier costs
- Labour costs
- Rent and overheads
- GST obligations
- Cash flow
- Customer purchasing behaviour
- Competitor pricing
- Desired profit margins
The goal is not simply to replace a surcharge with a price increase. It is to understand the business’s overall economics and make sure pricing remains sustainable.
What small businesses should consider
Small businesses may be particularly affected because they can face higher payment processing costs than larger businesses.
The ACCC’s published data shows that processing costs vary according to business size and payment type, with smaller businesses generally paying higher rates than larger businesses.
For a small business, even a relatively small percentage can become significant when applied across a large volume of transactions.
Business owners should therefore consider whether their current payment provider remains competitive.
The RBA’s reforms also include greater transparency around card payment fees, which is intended to make it easier for businesses to compare what they are paying and shop around for better arrangements.
October 1 is a pricing review opportunity
The upcoming surcharge ban can be viewed as more than a compliance change.
It is an opportunity for Australian businesses to review whether their pricing accurately reflects the cost of running the business.
Businesses that have not reviewed their prices for several years may discover that payment processing is only one of several costs affecting profitability.
A broader pricing review could identify outdated prices, low-margin products, unnecessary expenses or services that are no longer priced appropriately.
This can be particularly important in an environment where wages, rent, insurance, technology and supplier costs can all change over time.
How Sunnyside Financial Group Can Help
The October 1 card surcharge changes are a good reminder that pricing, cash flow and profitability are closely connected.
For business owners, the key question is not simply whether a card surcharge disappears. It is whether the business’s prices continue to support healthy margins after all operating costs are taken into account.
Sunnyside Financial Group can help Australian businesses review their financial position, understand their numbers and make more informed decisions around pricing, cash flow, tax and profitability.
A review can help business owners understand where money is coming from, where it is going, and whether current pricing is supporting the level of profit the business needs.
As payment rules change, having accurate financial information can make it easier to adjust without making decisions based purely on guesswork.
Final Thoughts
Australia’s card surcharge changes will take effect from 1 October 2026, bringing an end to separate surcharges for covered card payments.
For consumers, the change should make prices clearer at the checkout.
For businesses, however, the cost of accepting card payments does not disappear. Those costs may instead be absorbed by the business, reduced through better payment arrangements, or incorporated into the overall prices of products and services.
This means the real impact will depend on how individual businesses respond.
For Australian business owners, now is a useful time to review payment processing costs, pricing, margins and cash flow before the new rules take effect.
General information disclaimer: This article provides general information about Australia’s card payment surcharge changes and should not be taken as financial, legal, tax or business advice. Businesses should consider their individual circumstances and seek appropriate professional advice where required.
