This article was written by Nancy Wang Principal Solicitor at W & G Lawyers.
From 1 October 2026, Australian businesses will no longer be permitted to apply card payment surcharges on most card transactions.
If your business currently adds a surcharge when customers pay by card, it’s time to prepare. While payment providers will automatically remove surcharge functionality, businesses still need to update their pricing, signage and customer communications before the deadline.
Here’s what you need to know.
Why Are Card Surcharges Being Banned?
On 31 March 2026, the Reserve Bank of Australia (RBA) released its Conclusions Paper following its Review of Merchant Card Payment Costs and Surcharging.
The RBA concluded that card payments have become the default way Australians pay for goods and services. Because consumers increasingly have little practical ability to avoid paying by card, surcharges are no longer considered an effective way of encouraging lower-cost payment methods.
To support the ban, the RBA is also reducing interchange fee caps, with the aim of lowering merchants’ card acceptance costs—particularly for small businesses.
Which Payments Are Covered?
From 1 October 2026, businesses must not impose surcharges on payments made through the following card networks:
This includes:
- Debit cards
- Credit cards
- Prepaid cards
The ban applies regardless of how the customer pays, including:
- In-store payments
- Online transactions
- Mobile wallets such as Apple Pay and Google Pay, where the underlying card is issued on the eftpos, Visa or Mastercard networks.
Which Payment Methods Are Not Covered?
At present, the surcharge ban does not extend to:
- American Express (issued directly by Amex)
- Diners Club
- PayPal
- Buy Now Pay Later services such as Afterpay and Zip
However, there are two important qualifications.
1.American Express
Although the RBA’s reforms do not currently cover American Express, Amex has announced that it will amend its merchant rules so businesses can no longer surcharge Amex transactions from 1 October 2026.
In practice, most businesses should expect Amex surcharging to end at the same time as Visa, Mastercard and eftpos.
If American Express forms a significant part of your payment mix, confirm the position with your payment provider.
2.Further RBA Review
The RBA has also flagged a further review covering non-designated payment methods, including:
- American Express
- Buy Now Pay Later services
- Mobile wallets
The regulatory position for these payment methods may change in the future.
How Will the Ban Be Enforced?
Rather than creating a new law directed at merchants, the ban will be implemented through the rules of the relevant card schemes.
From 1 October 2026, Visa, Mastercard and eftpos will prohibit merchant surcharging through their scheme rules and merchant agreements. The RBA’s Payments System Board has also directed acquirers and payment terminal providers to remove surcharge functionality from their systems.
In practical terms, businesses should expect the ability to apply card surcharges to disappear from their payment platforms. Continuing to impose a surcharge would place a merchant in breach of its merchant agreement.
What Should Your Business Do Before 1 October 2026?
1.Remove All Surcharge References
Review every point where customers may see or be told about card surcharges.
This includes:
- Point-of-sale signage
- Counter notices
- Website checkout pages
- Online booking systems
- Customer emails and invoices
- Staff scripts and training materials
Businesses should also avoid simply renaming the surcharge.
The Australian Competition and Consumer Commission (ACCC) has made it clear that describing a card surcharge as an “administration fee”, “service fee” or “handling fee” does not change its legal character if it only applies when a customer pays by card.
2.Review Your Pricing
This is likely to be the most significant change for many businesses.
From 1 October, card acceptance costs can no longer be recovered through a separate surcharge. Instead, businesses will need to absorb those costs or build them into their overall pricing.
Before the deadline, consider:
- Reviewing your merchant statements to understand your actual card acceptance costs.
- Assessing whether your current pricing and profit margins remain sustainable.
- Speaking with your payment provider about how the reduced interchange fees will affect your merchant costs.
Although the RBA expects lower interchange fees to reduce costs, the actual savings will depend on your payment provider and merchant agreement.
Can You Still Offer a Cash Discount?
Yes.
The reforms prohibit card surcharges, not payment discounts.
Businesses may still lawfully offer customers a discount for paying by cash or bank transfer, provided the advertised pricing complies with Australian Consumer Law.
Looking Ahead
The card surcharge ban forms part of a broader package of payment system reforms.
Further changes are expected, including:
- Additional reductions to domestic interchange fees.
- New international interchange fee caps from 1 April 2027.
- The RBA’s review of American Express, Buy Now Pay Later services and other non-designated payment methods.
Businesses should continue to monitor these developments, as further reforms may affect payment acceptance and pricing strategies.
Final Thoughts
For most businesses, the practical impact of the reforms will extend beyond simply switching off card surcharges. Businesses should review their pricing models, customer communications and merchant arrangements well before 1 October 2026 to ensure a smooth transition and avoid inadvertent breaches of their merchant agreements.
This article provides general information only and does not constitute legal, financial or accounting advice. The regulatory framework is established by the Reserve Bank of Australia and implemented through card scheme rules and merchant agreements. Businesses should obtain professional advice regarding their particular circumstances. The RBA’s review of non-designated payment methods and the proposed April 2027 interchange reforms were not finalised at the time of writing and remain subject to change.
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