Australia's long-standing practice of adding a separate fee when customers pay by card is set to end on Thursday, October 1. The change applies to transactions on eftpos, Mastercard, Visa, and American Express networks, covering prepaid, debit, and credit cards. The Reserve Bank of Australia is scrapping its prohibition on so-called no-surcharge rules, which had prevented payment networks from banning the practice. Once those rules are enforced through merchant contracts, businesses will no longer be able to tack on a distinct card fee at the point of sale.
However, the reform does not erase the underlying cost of accepting electronic payments. Merchants may simply build that expense into their listed prices. For a A$10 item, a 1.5% surcharge previously added 15 cents; now a shop might raise the shelf price instead. That distinction will determine whether households actually save money or merely see a simpler checkout process. The Australian Competition and Consumer Commission (ACCC) has warned businesses against disguising card fees under alternative labels.
What Changes at the Register
From October 1, a merchant cannot add a separate surcharge because a customer used a covered card. The rule generally extends to cards issued overseas. An invoice generated before that date may also lose its surcharge if payment occurs afterward. PayPal's no-surcharge rule takes effect on October 5, according to the RBA, creating a four-day window when its treatment differs from the card networks. UnionPay has also announced it will remove surcharging. Customers should still check the payment method and transaction date.
Weekend and public-holiday surcharges can remain, as can genuine booking, delivery, or service fees. Taxi card charges remain subject to state and territory regulations. Businesses may offer a clearly disclosed discount for cash or PayID, provided the full non-discounted price remains the main displayed price.
The Cost Has Not Vanished
Australia is reversing a framework introduced in 2003, when surcharging was allowed to steer shoppers toward cheaper payment methods as credit-card use grew. The RBA now points to single-rate merchant plans, weak disclosure, and cash use falling to 15% of payments by number in 2025. It found limited evidence that regulated-card surcharges still changed payment choices.
Card acceptance still costs merchants money. The ACCC says those costs may be built into the price of goods or services. Its example turns a A$60 haircut plus a 1% card fee into a listed price of A$60.60. A larger increase needs an honest explanation; a salon charging A$65 because labour and energy also became dearer cannot blame the full rise on this reform. Misleading price claims remain subject to Australian Consumer Law.
The RBA is simultaneously cutting wholesale interchange caps. The domestic consumer-credit cap falls from 0.8% to 0.3%. The debit and prepaid cap falls from 10 cents, or 0.2%, to 8 cents, or 0.16%. Those caps are only one part of a merchant's total payment bill. Terminal rental, gateway services, and payment-provider margins can remain. Savings therefore depend on providers passing lower wholesale costs through to each business.
The economics may also surface on cardholders' statements. The RBA acknowledges that issuers may change rewards, fees, or benefits after interchange caps fall. Each change remains a commercial choice, not a requirement of the surcharge rule. Consumers should compare any bank notice with the card's actual terms and effective date.
Merchant Exposure Varies
Estimated processing costs as a share of transaction value range widely. Small merchants with under A$1 million in annual card turnover face 0.85%–2.00% for debit or eftpos and 1.00%–2.00% for credit. Medium merchants (A$1 million–A$100 million) face 0.25%–1.00% and 0.75%–1.50%, respectively. Large merchants above A$100 million face 0.25%–0.50% and 0.50%–1.00%. The scale is material: the RBA estimated that 16% of merchants imposed designated-network surcharges in 2024–25, charging about A$1.8 billion, including A$1.6 billion paid by consumers. Business card users paid the remaining A$0.2 billion.
That A$1.6 billion is the disappearing line item, not a guaranteed net household saving. Treasury ministers estimate lower interchange costs will save small businesses A$910 million annually, but that depends on provider pass-through and merchant pricing.
What Businesses Must Do
Before Thursday, businesses should inspect every place where a surcharge appears, including terminals, point-of-sale software, invoices, booking tools, and online checkouts. The small-business ombudsman recommends testing systems on October 1. Menus, signs, and websites may need new prices or wording, and staff should know which fees remain valid. Providers may disable surcharge functions automatically, but merchants should confirm rather than assume.
There is no general exemption for small businesses or not-for-profits, and business-to-business card payments are not automatically exempt. Any exception must come from a network rule, law, or regulation. The federal business portal advises merchants to compare payment plans and understand their statements, because smaller firms usually face higher processing rates. A single blended provider rate can also hide cheaper debit transactions.
Card networks and payment providers will enforce the new rules. Consumers who believe a business is still imposing a disguised card fee can lodge a complaint with the ACCC or the relevant network. The RBA will continue to monitor the transition and may adjust its framework if unintended consequences emerge.
