Australian businesses that currently pass credit or debit card processing costs on to customers will need to change the way they charge from 1 October 2026.
Following its Review of Merchant Card Payment Costs and Surcharging, the Reserve Bank of Australia (RBA) has concluded that card payment surcharges should be removed across the major card networks.
For many businesses, particularly those processing a large number of card transactions, the change will mean reviewing payment arrangements, merchant fees and potentially overall pricing.
What is changing?
From 1 October 2026, businesses will generally no longer be able to add a separate surcharge because a customer chooses to pay using:
- eftpos debit or prepaid cards;
- Visa debit, credit or prepaid cards;
- Mastercard debit, credit or prepaid cards; and
- American Express cards.
UnionPay has also indicated that it will remove card surcharging from 1 October 2026.
PayPal has announced a similar change, with its no-surcharge rule expected to take effect from 5 October 2026.
The changes apply to card transactions made in-store, online and through digital wallets where the underlying payment is made using an affected card.
Until 30 September 2026, the existing rules continue to apply. This means businesses that currently surcharge customers can continue to do so, provided the surcharge does not exceed the business’s permitted cost of accepting that payment method.
Does this mean businesses have to absorb the card fees?
Businesses will still pay merchant and card processing fees.
The significant change is that, rather than recovering those costs through a separate card surcharge, businesses can incorporate payment processing costs into their overall pricing.
For example, a business currently charging $100 plus a 1% card surcharge may decide to review whether its standard pricing adequately covers the cost of accepting payments once separate card surcharging is removed.
That does not necessarily mean every business should simply increase all of its prices by its existing surcharge percentage.
Merchant costs can vary considerably depending on transaction volumes, payment methods, providers and pricing arrangements. This makes the period before October a good opportunity to understand exactly what your business is paying.
Review your merchant fees
The RBA is encouraging businesses to review their payment arrangements and consider whether they are receiving competitive pricing from their payment provider.
Businesses may wish to:
- review merchant statements and identify the actual cost of accepting different payment types;
- speak with their bank or payment service provider about their current pricing arrangement;
- compare alternative payment providers;
- consider whether their transaction volumes qualify them for better merchant rates; and
- review how payment processing costs are built into their overall pricing and margins.
The RBA is also introducing other reforms designed to place downward pressure on merchant payment costs, including lower interchange fee caps and greater transparency around payment fees.
Additional transparency requirements will progressively commence from late 2026 and into 2027, which should make it easier for businesses to understand and compare some payment costs.
Can I simply rename the card surcharge?
Businesses need to be careful here.
The change specifically targets an additional fee charged because the customer pays by card.
Simply changing the name from “card surcharge” to “processing fee” or “service fee” is unlikely to change the underlying nature of the fee if it is only charged when a particular card payment method is used.
However, genuine charges that are unrelated to the customer’s choice to pay by card are not automatically prohibited by these changes.
For example, the RBA confirms that the new rules do not prevent legitimate:
- booking fees;
- service fees;
- delivery charges;
- weekend surcharges; or
- public holiday surcharges.
Businesses must still ensure that prices and additional charges are clearly displayed and comply with Australian Consumer Law.
Can businesses offer a cash or alternative payment discount?
Yes.
Businesses can continue to encourage customers towards lower-cost payment methods by offering a discount rather than imposing a card surcharge.
For example, a business may offer a discount for payment by cash or another eligible payment method.
The important distinction is that the normal advertised price should accurately represent what the customer will pay unless they qualify for the clearly disclosed discount.
What about business-to-business transactions?
Businesses should not assume the changes only apply to retail consumers.
According to the RBA, card payments made between businesses are not automatically exempt from the new no-surcharge rules.
Businesses that regularly collect large invoices by corporate or business credit card should therefore review the potential impact carefully. A card processing cost that appears relatively small on a retail transaction can become material when customers use a credit card to pay invoices worth thousands or tens of thousands of dollars.
This may be particularly relevant to professional services, wholesalers, trades, suppliers and other businesses that accept card payments for larger invoices.
What if an invoice is issued before 1 October?
Businesses should also consider invoices issued before the commencement date but paid afterwards.
The RBA advises that where a customer makes the card payment on or after 1 October 2026, card surcharging may no longer be available even if the invoice itself was issued before the change.
Businesses should check with their payment provider regarding how their payment systems will handle these transactions.
Many major payment providers are expected to remove card surcharge functionality from their terminals and systems around the commencement date.
What should businesses do now?
With the new rules approaching, businesses should avoid leaving the transition until the final few days of September.
Consider reviewing:
Your payment costs
Understand what you are currently paying for eftpos, debit cards, credit cards and other payment methods.
Your pricing
Consider whether payment processing costs are adequately reflected in your product or service pricing.
Your payment provider
Ask whether a more competitive merchant arrangement is available and how your terminals or payment systems will change from October.
Your invoices and payment terms
Businesses accepting card payments on larger invoices should consider the financial impact of no longer recovering these costs separately.
Your website and point-of-sale material
Remove references to card surcharges where required and update online checkout systems, invoices, signs and customer communications.
Your margins
Rather than simply treating merchant fees as another unavoidable cost, consider the impact within your broader pricing and profitability.
An opportunity to review your payment costs
For some businesses, the removal of card surcharges will represent an additional cost that needs to be managed. For others, the effect may be relatively small.
The important thing is to understand the numbers.
If your business processes significant card payments, now is an appropriate time to review your merchant fees, pricing, gross margins and payment arrangements rather than waiting until the rules change.
At Leenane Templeton, we work with businesses to understand their costs, improve profitability and develop pricing strategies that reflect the true cost of doing business.
If you are concerned about how the removal of card surcharges could affect your business, speak with our team about reviewing your pricing and financial performance before the changes commence.
For further details read: https://www.rba.gov.au/payments-and-infrastructure/review-of-retail-payments-regulation/2026-03/conclusions-paper/faqs/
This article provides general information only and does not constitute legal, taxation or financial advice. Businesses should also confirm the application of the new card network rules with their bank or payment service provider.