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Card Surcharges Are Changing From 1 October 2026
Updated: Sep 28
If your business charges customers an additional fee for paying by card, 1 October 2026 is an important date to put in your calendar.
Australia's card payment rules are changing.
From 1 October, Visa, Mastercard and eftpos are introducing rules that prevent businesses from adding a surcharge when customers pay using their credit, debit or prepaid cards. American Express has also announced that it will remove card surcharging from the same date.
For businesses that have traditionally passed merchant fees directly on to customers, this could require changes to payment systems, pricing and cashflow.
So, what exactly is changing – and what should you do about it?
What Is Changing?
Until 30 September 2026, businesses can generally surcharge eligible card payments, provided the surcharge doesn't exceed the business's cost of accepting that particular payment type.
From 1 October 2026, the major card networks are moving to no-surcharge rules.
That means businesses will no longer be able to simply add an extra percentage or fee because a customer chooses to pay using Visa, Mastercard, eftpos or American Express.
Importantly, these changes relate specifically to card payment surcharges.
They don't automatically prohibit other legitimate charges such as hospitality weekend or public holiday surcharges or genuine booking fees.
Simply renaming a card surcharge a "processing fee", "service fee" or something similar, however, doesn't necessarily change what it actually is.
Who Is Responsible?
Ultimately, businesses need to ensure their payment and pricing practices comply with the rules applying to the payment methods they accept.
Your bank, merchant provider, payment gateway or software provider may automatically make changes to your payment system.
But don't assume that means everything has been taken care of.
Businesses should check every place they accept payments, including:
• EFTPOS terminals
• Online stores
• Accounting software payment links
• Booking systems
• Websites
• Apps
• Invoicing systems
• Point-of-sale software
• Recurring payment arrangements
If you use multiple payment providers, you may need to check each one separately.
What Happens To The Merchant Fee?
This is probably the biggest question for small businesses.
The merchant fee doesn't disappear.
Your business may still incur a fee every time a customer pays by card.
What changes is your ability to separately pass that particular cost on as a card surcharge.
Businesses remain free to review their overall pricing and factor legitimate operating costs into the prices they charge.
Merchant fees are ultimately another cost of doing business – alongside wages, rent, insurance, electricity, software, superannuation and the growing list of other costs businesses need to manage.
For some businesses, absorbing the merchant cost may be manageable.
For others – particularly businesses operating on tight margins or processing significant volumes of card payments – the impact may warrant a broader pricing review.
Before You Increase Your Prices...
Do the numbers first.
Work out:
1. How much did your business pay in merchant fees last year?
2. How much of that was recovered through customer surcharges?
3. What percentage of your sales are paid by card?
4. What will the annual cost be if those fees are no longer separately recovered?
5. Is your current payment provider still competitive?
The Reserve Bank is also introducing measures designed to reduce merchant payment costs and improve transparency, so don't automatically assume your current merchant fee is the price you need to continue paying.
Shop around.
Ask questions.
Compare providers.
And understand exactly what you're paying for.
An Example
Imagine a business processes $500,000 of card payments each year and its average merchant cost is 1.5%.
That's approximately $7,500 per year in card processing costs.
If the business previously recovered most of that through customer surcharges, removing the surcharge could have a noticeable impact on its bottom line.
The answer isn't necessarily to simply increase every price by 1.5%.
The business should consider its payment mix, margins, competitors, overall operating costs and whether it can negotiate a better merchant rate before deciding how its pricing should change.
What About Xero And Stripe?
Some payment providers are already announcing changes ahead of 1 October.
For example, Xero has advised Australian businesses using Stripe accounts where pricing and fees are managed by Xero that its domestic card fee will reduce from 1.8% + 30 cents to 1.75% + 30 cents per transaction from 1 October 2026.
For affected accounts, Xero says this change will occur automatically. It's a small reduction, but it's also a good reminder of why businesses should review their merchant arrangements rather than simply accepting their existing rates.
Can Businesses Encourage Customers To Use Cheaper Payment Methods?
Potentially, yes.
Rather than penalising a particular card payment with a surcharge, businesses may consider whether offering discounts for preferred payment methods makes commercial sense.
Before changing payment arrangements, speak with your payment provider and make sure your pricing and customer communications are clear.
What Happens If A Business Keeps Surcharging?
From 1 October, businesses accepting affected card types will need to comply with the no-surcharge rules imposed through the relevant card networks and merchant arrangements.
Payment providers and card networks will play an important role in enforcing those rules, and many payment providers are expected to disable surcharge functionality automatically.
Australian Consumer Law also continues to apply to how businesses advertise and represent their prices.
Businesses should therefore avoid trying to disguise a prohibited card surcharge as another type of fee or misleading customers about why prices have increased.
What Does This Mean For Consumers?
For everyday Australians, the most obvious difference should be greater certainty about what something actually costs.
If your coffee says $5, your haircut says $60 or your invoice says $500, you shouldn't then be surprised by an additional card surcharge when you go to pay using one of the affected card networks.
But there is another side to this.
Card processing hasn't suddenly become free.
Businesses still need to recover their operating costs somewhere.
Some businesses may absorb the expense. Others may negotiate cheaper payment processing arrangements. Others may decide their overall prices need to increase.
So while consumers may see fewer separate card fees, some of those costs may ultimately become part of the advertised price.
What Should Businesses Do Before 1 October?
Start with these steps:
STEP 1 – Identify everywhere you currently accept card payments.
STEP 2 – Check whether you're currently applying a surcharge.
STEP 3 – Contact each payment provider and ask what will happen from 1 October.
STEP 4 – Calculate what card processing actually costs your business annually.
STEP 5 – Review your pricing and gross margins.
STEP 6 – Compare merchant providers and payment plans.
STEP 7 – Update websites, signage, menus, invoices, booking systems and customer communications where required.
STEP 8 – Check everything again after 1 October to make sure your systems are operating as intended.
Final Tip
Don't look at this purely as another compliance change. Use it as an opportunity to review your entire payment process.
When was the last time you compared your merchant fees?
Do you know what accepting card payments actually costs your business each year?
Are you paying for payment services you don't need?
And have rising operating costs gradually eaten into your margins without you adjusting your prices?
Sometimes a legislative change forces us to look at something we've simply allowed to run in the background for years. This might be one of those opportunities.
If you'd like assistance understanding the financial impact on your business, reviewing your margins or incorporating merchant costs into your budgeting and pricing decisions, please contact the MJA Business Solutions team.
We're here to help.
Mel
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