From 1 October 2026, Australian businesses can no longer add a surcharge when a customer pays by card. If you’ve been passing your merchant fees on at the checkout, that cost has just landed back on your bottom line. Here’s what’s changed, what it really costs you, and why this is the right moment to review your pricing.
The Surcharge Ban: Don’t Absorb the Cost, Price for It
What changed on 1 October?
Following the Reserve Bank of Australia’s Review of Merchant Card Payment Costs and Surcharging, eftpos, Mastercard and Visa have introduced no-surcharge rules. In practical terms:
- No more card surcharges: you can no longer add a fee because a customer chooses to pay by debit, prepaid or credit card on the eftpos, Mastercard or Visa networks, including tap-and-go and mobile wallets like Apple Pay and Google Pay.
- It’s enforced through your merchant agreement: the ban reaches you through the card scheme rules and your bank or payment provider’s terms. Most providers have already switched surcharging off in their terminals and online gateways. Continuing to surcharge puts you in breach of your merchant agreement.
- Interchange caps have been cut: the cap on domestic consumer credit card interchange has dropped from 0.8% to 0.3%, and debit and prepaid cards from 10 cents (or 0.2%) to 8 cents (or 0.16%). Commercial credit cards stay at 0.8%, and a 1.0% cap on foreign-issued cards starts from 1 April 2027.
- More fee transparency: card networks and large payment providers must now publish their fees quarterly, with the first merchant service fee data due by 30 October 2026.
Booking, service or administration fees can generally still be charged, provided they apply no matter how the customer pays and are disclosed upfront. What you can’t do is dress up a card surcharge under a different name.
Lower interchange doesn’t mean no fees
Interchange is only one part of what you pay. Your merchant service fee also includes card scheme fees and your provider’s own margin, plus terminal rental and other charges. The RBA has capped interchange, not your total merchant fee. Some providers have reduced their pricing in response, but many businesses will see only a modest saving, and some won’t see one at all unless they ask for it.
Consider a business turning over $3 million a year with 70% of sales paid by card and an all-in merchant fee of 1.2%. That’s around $25,000 a year in card costs. If that business was surcharging until 30 September, that $25,000 was being paid by customers. From 1 October, it comes straight out of profit, unless the business does something about it.
Absorbing merchant fees is a decision, not a default. If you do nothing, you’ve chosen to take a pay cut. The businesses that come through this well will be the ones that treat it as a pricing decision and act on it deliberately.
The bigger issue: your prices haven’t kept up
For many of the business owners we work with, merchant fees are just the latest cost that’s crept in without a matching price increase. Over the last few years, most businesses have absorbed some or all of the following:
- Wages and on-costs: successive award increases, plus the Superannuation Guarantee rising to 12% from 1 July 2025.
- Insurance: business, vehicle, workers compensation and professional indemnity premiums have risen well above inflation in many industries.
- Rent and energy: lease reviews and electricity and gas costs continue to bite.
- Software and subscriptions: accounting, payroll, CRM and industry software have all steadily increased, and the list of subscriptions keeps growing.
- Materials and suppliers: input costs that went up and, for the most part, never came back down.
If your prices haven’t moved in line with these increases, your margins have been quietly shrinking. The surcharge ban gives you a clear, legitimate reason to fix that now.
Why a small price increase goes a long way
Price is the most powerful profit lever in your business. On that same $3 million business, a 3% price increase adds around $90,000 in revenue, and because your costs don’t rise with it, almost all of that flows to profit. It covers the $25,000 in merchant fees several times over and starts to recover the cost increases you’ve been carrying.
Customers are also more prepared for price changes right now. Many have just noticed surcharges disappearing at the checkout and understand that businesses are adjusting their pricing in response.
How to review your pricing: a practical checklist
- Know your true card costs: pull your last three merchant statements and work out your effective rate (total fees divided by card sales). Compare it against the published fee data from 30 October and ask your provider whether your rate has been reduced under the new caps.
- Turn on least-cost routing: for dual-network debit cards, routing through the cheaper network can lower your costs. Check that it’s switched on.
- Calculate your cost increases since your last price review: wages, super, insurance, rent, energy, software and materials. This tells you the real gap you need to close.
- Know your margins by product or service: not every line needs the same increase. Some can carry more, and some may need repricing or dropping altogether.
- Update every price point: price lists, websites, quotes, proposals, menus, booking systems and contracts, along with your terms and conditions, so any reference to card surcharges is removed.
- Communicate with confidence: a short, clear message about rising costs and your commitment to quality and service is all most clients need. Avoid long apologies.
A price increase is only half the job. The extra profit it creates should be planned for, not just spent. Improved margins flow straight into your tax position, your cashflow and your ability to reduce debt and build wealth outside the business. That’s where a proper profit and tax strategy conversation pays for itself.
Don’t forget the tax and cashflow implications
Higher profit means a higher tax bill if it isn’t planned for. Before the end of the financial year, it’s worth reviewing your structure, your PAYG instalments, your super contribution strategy and how profits are distributed or retained, so the extra margin you’ve earned works harder for you. If your business operates through a company or trust, the timing and method of extracting those profits matters just as much as making them.
How OnVenture can help
We work with business owners turning over $1 million to $10 million to improve profit and cashflow, then turn that improvement into lasting wealth. If you’d like help working through your pricing, we can:
- Analyse your merchant fees, margins and cost increases to identify the price adjustment your business actually needs.
- Model the profit, cashflow and tax impact of different pricing scenarios before you commit.
- Build a tax and wealth strategy around the extra profit, so it’s working for you and not just landing on next year’s tax bill.
Ready to Go?
Give us a call on 1300 300 013 or book a 30-minute strategy call: HERE
This article is general in nature and does not take into account your personal financial situation, needs, or objectives. It should not be relied upon as personal financial, tax or legal advice. Please contact OnVenture Accounting & Advisory for advice tailored to your circumstances before acting on any of the above.
References: Reserve Bank of Australia, Review of Merchant Card Payment Costs and Surcharging — Conclusions Paper (March 2026); eftpos, Mastercard and Visa no-surcharge rules effective 1 October 2026; Superannuation Guarantee (Administration) Act 1992.