From 1 October 2026 you cannot add a surcharge when a customer pays with an eftpos, Mastercard or Visa card. If you never surcharged, your receipts look the same as they did in September. If you did, the cost of accepting cards has not gone anywhere. It has moved off the customer’s receipt and into your margin, and the question for this month is whether you have measured it.
This guide covers the change itself and what card acceptance costs a typical small business, then how to reprice from your own numbers and where a surcharge tends to live on after the rules move.
What changed on 1 October 2026
The Reserve Bank’s Review of Merchant Card Payment Costs and Surcharging concluded that surcharging on debit and credit cards should end on 1 October 2026 for eftpos, Mastercard and Visa. The mechanism matters. The RBA removed its own prohibition on the card networks’ “no surcharge” rules, so the networks now enforce the ban rather than the RBA. The rules cover the networks’ credit and debit cards, prepaid cards as well, including cards issued overseas.
American Express and PayPal sit outside the RBA’s regulation, and both have decided to remove surcharging too. The RBA’s pages say nothing about Diners Club, UnionPay, buy now pay later or bank transfers. Ask your payment provider about anything outside the three big networks before you assume it is still allowed.
Two things the change leaves alone. You can still offer a discount for a particular payment method. And a weekend or public holiday fee, a booking fee or a service fee is not a surcharge, so those stay.
What card acceptance actually costs you
The RBA found that around 16 per cent of Australian businesses surcharged. If yours was one of them, the surcharge was there to recover the merchant service fee, so the fee is the number to find. It lives on your merchant statement rather than your bank feed, and it is seldom one figure. Most providers charge a percentage per transaction. Many add a fixed amount per transaction as well, and a monthly terminal or plan fee on top of that.
The measure we trust is three months of statements added together, divided by the card turnover for the same three months. That gives you an effective rate, and it runs higher than the headline percentage because the fixed fees land on each small transaction. For a business taking $40,000 a month on card at an effective 1.5 per cent, that is $600 a month, or $7,200 a year, that the counter used to recover and now does not.
If the file sits in Xero or another cloud platform, the merchant fees should have their own expense account by now, reconciled against the settlement deposits. If someone has buried them inside bank fees or netted them off against sales, fix the coding this month. You cannot manage a cost you cannot see.
Absorb it or reprice?
No rule says you must raise prices. The RBA’s own view is that businesses can reflect payment costs in their overall pricing, as they do with rent or wages. The decision is commercial, and we see two defensible options:
- Absorb it. Sensible when card is a small share of turnover or your margin can carry it. Also sensible when a visible price rise would cost more in lost customers than it recovers.
- Reprice across the board. If card is most of your turnover, a price increase equal to your effective card rate recovers the cost without a surcharge. Round the numbers; a $9.50 coffee becoming $9.65 is a price list no customer wants to read.
Our view is that a business taking most of its turnover on card should reprice once and leave the receipt alone. A fee line draws more complaint than the same amount sitting inside the price.
Keeping the surcharge under another name is out. A “card handling fee” that applies only to card payments is a surcharge. A genuine discount for cash stays legal, provided it comes off the advertised price; a surcharge in disguise is still a surcharge.
Three places a surcharge keeps living after the ban
- The terminal or POS. Most terminals had surcharging switched on as a setting. Check it is off, and check any separate online or phone-order gateway as well.
- Invoice templates. Businesses that invoice often added a line such as “1.5% card payment fee” to the template or to the online payment page. Remove the line, and remove the automatic fee on the payment service too.
- Website checkout. eCommerce platforms and booking systems often carry a payment-method fee in their settings that someone set up years ago and forgot about.
Then look at the ledger. If a surcharge income account exists, it should go quiet from October. If it does not, something is still charging it.
What your bank must tell you from 30 October
The same review lowered the caps on interchange fees from 1 October 2026, with a further step on 1 April 2027. No rule forces providers to pass the reduction on to you. There is a transparency rule, though: from 30 October 2026 the card networks and large acquirers must publish the fees they charge, and from 30 January 2027 large acquirers must publish how the interchange reductions have flowed through to merchant fees.
That makes November the month to compare. The RBA’s advice is that businesses may wish to review whether they are on the best plan and shop around. Take your effective rate from the step above into that conversation, because a provider quoting a headline percentage is not quoting what you pay.
Where a bookkeeper fits
None of this is hard. All of it is easy to leave undone. A bookkeeping service that reconciles your merchant settlements each month can work out the effective rate in an afternoon and confirm the surcharge income account has gone quiet. It can also put the merchant fee line into the monthly report, so you see the cost each month rather than once a year at tax time.
Frequently asked questions
Can I still charge more for card than cash?
Not as a surcharge on eftpos, Mastercard or Visa. You can offer a discount for paying by a particular method, such as cash, provided the advertised price is the card price and the discount comes off it.
Does the ban cover American Express?
American Express sits outside the RBA’s regulation, and it has decided to remove surcharging from the same date, as has PayPal. For Diners Club, UnionPay or buy now pay later, the RBA’s pages are silent; ask your provider.
Will my merchant fees go down?
Interchange caps fell on 1 October 2026 and fall again on 1 April 2027, but no rule requires providers to pass that on. They do have to publish their fees from 30 October 2026, which is your opportunity to compare and switch.
I never surcharged. Do I need to do anything?
Only the fee review. The lower interchange caps and the published fee information apply to any business that accepts cards, whether or not it surcharged.
If you want the effective rate worked out from your own statements, or the surcharge settings and ledger checked across your systems, book a discovery call at ascendsolutions.com.au/contact or phone (02) 6189 2248.
