End of Card Surcharges in Australia: What Business Owners Need to Know

Written by Daniel Dubois

For many Australian businesses, card surcharges have long been a practical way to recover the cost of accepting electronic payments. That changed on 1 October 2026, when new payment rules effectively prohibited surcharges on transactions processed through Visa, Mastercard, EFTPOS and other major card networks.

The change is designed to create simpler and more transparent pricing for consumers. However, while surcharges may have disappeared, the underlying cost of accepting card payments has not.

For business owners, the focus must now shift from recovering payment costs to actively managing them.

Why Were Card Surcharges Removed?

The Reserve Bank of Australia concluded that card surcharging was no longer achieving its original objective of steering consumers towards lower-cost payment methods. As card payments became the dominant form of payment, surcharges increasingly became an unavoidable cost for consumers, reducing price transparency and making it harder to determine the true cost of goods and services until the point of payment.

The RBA's review also highlighted concerns about the overall cost of card payments across the economy (up to $4.3B annually), particularly for smaller businesses that often pay higher transaction fees than larger merchants. In response, the reforms not only remove card surcharges but also seek to reduce underlying merchant payment costs through lower interchange fee caps, increased competition and greater transparency around the fees charged by payment providers.  

The Challenge for Business Owners

Many businesses continue to incur costs such as:

  • Merchant service fees

  • Payment gateway charges

  • Terminal rental fees

  • Fraud prevention and chargeback administration costs

Historically, some or all of these costs could be recovered through card surcharges. Going forward, businesses will need to consider how these costs fit within their overall pricing and profitability strategy.

For businesses operating on tight margins, particularly in retail, hospitality, trades and professional services, even small payment costs can have a noticeable impact on profitability.

Strategies to Protect Margins

Rather than focusing on recovering payment costs, businesses should focus on reducing them wherever possible.

  • Encourage EFTPOS and Debit Transactions

    • Debit card transactions are often less expensive to process than premium credit card transactions. Simple measures such as staff training, payment terminal configuration and customer education can help reduce overall merchant fees.

  • Promote Direct Bank Transfers

    • Direct credit remains one of the lowest-cost payment methods available.

    • For professional services firms, trades, wholesalers and other invoice-based businesses, encouraging customers on your invoices and statements to pay by bank transfer may reduce transaction costs and improve margin retention.

  • Offer BPAY and Direct Debit Options

    • BPAY and direct debit arrangements can provide lower-cost alternatives to card payments while also improving cashflow and collection efficiency.

    • These payment methods may be particularly attractive for businesses with recurring billing arrangements.

  • Review Merchant Service Arrangements

    • Many businesses have not reviewed their merchant service agreement for several years.

    • The new transparency measures introduced by the RBA make it easier to compare providers and identify opportunities to reduce payment costs. Businesses should regularly review rates, transaction mixes and provider offerings to ensure they remain competitive.

The Upside of Card Payments

While reducing payment costs is important, businesses should be careful not to lose sight of the sales benefits that card acceptance provides.

Consumers increasingly expect convenient payment options, particularly for larger purchases where credit cards can assist with cashflow management or reward programs. Businesses that continue to offer simple, flexible payment options may have an advantage where competitors respond to the surcharge changes by restricting payment methods.

The goal should not be to discourage card payments altogether. Instead, businesses should aim to reduce processing costs while continuing to provide the payment convenience customers expect. In many cases, the additional sales generated through easy payment options can outweigh the associated merchant fees.

The Bottom Line

The end of card surcharges marks a significant shift in how Australian businesses recover payment costs. While consumers will benefit from more transparent pricing, businesses will need to take a more strategic approach to managing payment expenses.

The most successful businesses are unlikely to be those that discourage card payments altogether. Rather, they will be those that understand the true cost of accepting payments, encourage lower-cost alternatives such as EFTPOS, direct credit and BPAY where appropriate, and regularly review their merchant arrangements.

Importantly, card acceptance remains a valuable sales tool. In an increasingly cashless economy, customers expect convenient payment options and may choose businesses that provide greater payment flexibility. The challenge is no longer how to recover card fees at the checkout, but how to balance customer convenience with margin protection.

As payment costs become increasingly embedded within the overall cost of doing business, business owners should ensure they are actively managing this expense in the same way they manage wages, rent and other operating costs.

Unsure how these changes may affect your business? Contact the team at Salt to discuss strategies to help protect your margins and improve payment efficiency.

Jenni Anderson