The short answer: from Thursday 1 October 2026, businesses across Australia can no longer surcharge card payments. The ban covers debit, prepaid and credit cards, including eftpos, Mastercard, Visa, American Express and UnionPay. You keep paying a merchant fee on every card sale, so the practical question is not whether to remove the surcharge, that is decided for you, but how to handle the cost you can no longer pass on separately.
Key takeaways
- Card surcharging is banned from 1 October 2026 on both debit and credit card payments.
- You still pay a merchant fee per transaction, though the RBA is cutting interchange caps, so the underlying cost should fall for many businesses.
- Weekend surcharges, public holiday surcharges, booking fees and service fees are not affected and do not need to be removed.
- Work out your true blended card cost from your merchant statements before you touch prices, then decide whether to absorb it or fold it in.
- The surcharge can be referenced in more places than the terminal, update the menu, website, booking and online ordering too.
What Actually Changes on 1 October 2026
From 1 October 2026, a business can no longer add a surcharge to a payment simply because the customer chose to pay by card. The Reserve Bank of Australia's reforms remove card-payment surcharging across debit, prepaid and credit cards, covering eftpos, Mastercard, Visa, American Express and UnionPay. The RBA has estimated the broader package could save consumers and businesses up to $1.8 billion a year.
Importantly, the reform is not only a ban. The RBA is also lowering the caps on the interchange fees that sit inside your merchant costs. The cap on domestic consumer credit card interchange, for example, drops from 0.8 percent to 0.3 percent. For a lot of small businesses that means the fee you are being asked to absorb is smaller than the surcharge you used to add, which is exactly why it pays to check the numbers before assuming you need a price rise.
What You Still Pay After the Ban
The surcharge going away does not mean card acceptance becomes free. You will still be charged a merchant service fee on every card transaction. What changes is visibility: instead of the customer seeing a separate line and covering the fee, the fee now sits inside your own costs. It either comes out of your margin or is built into your prices, and that is a decision, not an accident. The businesses that get caught out are the ones that flick the surcharge off at the terminal and never look at what it does to the bottom line.
Work Out Your Real Card Cost First
Before you change a single price, work out what card acceptance actually costs you, using your own merchant statements rather than a rule of thumb. The method is simple: add up the total card fees you were charged over the last three months, divide that by your total card sales over the same period, and multiply by 100. That percentage is your true blended card cost, and it already accounts for your real mix of debit and credit, tap and online.
Most Australian small businesses land somewhere between roughly 0.5 and 1.5 percent once the new lower fees apply, though yours could sit outside that depending on your card mix and provider. Whatever the figure, it tells you two things: how much margin you are now absorbing per dollar of card sales, and how small a price adjustment would need to be to restore it. A common surprise is that the honest number is well below the 1.5 to 2 percent surcharge many businesses had been adding.
How to Fold Card Costs Into Your Prices
Once you know your blended cost, you have three sensible options, and the right one depends on your margins and how price-sensitive your customers are.
| Approach | Best when | Watch out for |
|---|---|---|
| Absorb it | Your blended cost is small and your margins can carry it | Small percentages add up across high volume, so still measure it monthly |
| Small blended uplift | You want to hold margin across the board | Round sensibly, a blanket rise larger than your real cost reads as a grab |
| Reprice by margin | Some products or services already run thin | Needs current, accurate figures on what each line actually earns |
Whichever you choose, base it on the real number. Repricing by margin is usually the smartest move for a business with a wide product or service range, but it only works if your bookkeeping is current enough to show which lines are genuinely carrying the business and which are not.
Not sure what your merchant statements are really telling you, or what a price change does to your margin? Book a free call and we will help you work it out. No obligation, no lock-in contracts.
Where the Surcharge Might Be Hiding
The surcharge is rarely set in just one place. The terminal is the obvious one, but the fee, or wording describing it, often lives in several systems that are managed separately and easy to forget. Work through all of them together so nothing contradicts the new rule after 1 October.
| Where to check | What to update |
|---|---|
| EFTPOS terminal | Turn off the automatic card surcharge |
| Menu, price list or quote template | Remove any card surcharge note and update prices if you are folding the cost in |
| Website and online ordering | Remove surcharge lines at checkout and any surcharge wording in terms |
| Booking page | Check no card surcharge is applied at deposit or payment |
| Counter signage | Take down old "card surcharge applies" signs |
| Invoices and confirmation emails | Remove surcharge lines from templates and automated messages |
A surcharge quietly left on a booking page or a confirmation email after the ban is exactly the sort of inconsistency customers notice and complain about, even when the terminal itself was fixed on day one.
What You Should Not Change
The ban is specific. It only removes surcharges added because a customer pays by card. It does not touch weekend surcharges, public holiday surcharges, booking fees or service fees. Those are separate charges for a genuine reason and remain allowed, so there is no need to strip them out because of this change. If you run a weekend or public holiday loading to cover higher wage costs, leave it in place and keep it clearly disclosed.
Example: A Small Cafe Reprices
A small Geelong cafe had been adding a 1.5 percent card surcharge. Checking three months of merchant statements showed its real blended card cost, after the lower interchange caps, was closer to 0.9 percent. Rather than a blanket rise, the owner absorbed the cost on high-margin coffee and drinks, nudged a handful of thin food lines up by 20 to 50 cents to protect those margins specifically, switched off the terminal surcharge, and removed the surcharge note from the menu, the online ordering system and the counter sign on the same day. The weekend surcharge stayed exactly as it was. Net effect: margin held, no blunt price hike, and nothing left contradicting the new rule.