On 31 March 2026, the Reserve Bank of Australia handed down its final decision on merchant card payment costs and surcharging. It’s the biggest change to how Australian businesses pay for card acceptance since the surcharging framework was introduced back in 2003.
The short version: from 1 October 2026 you won’t be able to add a surcharge to accept card payments (in-store or online), and the wholesale fees you’re charged for card acceptance come down on exactly the same day. A second wave of changes, mostly around foreign card fees and statement transparency, lands on 1 April 2027.
Whether you’re a cafe, a tradie, a retail shop, a restaurant, a petrol station, an accommodation provider or an online store, this affects your pricing, your EFTPOS and POS setup, your checkout, and potentially your relationship with your payment provider. Here’s what’s actually happening, in plain English.
The RBA’s Conclusions Paper runs to thirteen separate policies. Three of them matter to you as a business owner.
This is worth understanding properly, because the mechanism explains who enforces it.
The RBA doesn’t regulate merchants directly. What it has done since 2003 is prohibit the card networks from imposing “no-surcharge” rules on their own participants. That prohibition is what made surcharging possible in the first place. From 1 October 2026, the RBA is lifting it.
The networks have already responded. eftpos, Mastercard and Visa have each confirmed they will introduce no-surcharge rules from 1 October 2026. American Express, which isn’t formally covered by the RBA’s decision because it operates as both issuer and network, has confirmed it will align from the same date.
The practical effect is the same as a ban: from 1 October you can’t add a surcharge to recover card acceptance costs on any of those four networks, in person or online. But the enforcement path is contractual, it runs through the card scheme rules and your merchant agreement with your acquirer, not through a government regulator. If surcharging persists anyway, the RBA has flagged it could recommend the Government legislate an actual ban.
Until 1 October, the existing rules still apply. Surcharges must not exceed your cost of acceptance, and the ACCC continues to enforce that in the meantime.
Interchange is the wholesale fee your bank or payment provider pays the card issuer every time a customer taps. It’s the largest single component of your merchant service fee. Here’s what changes, all from 1 October 2026 unless noted:
| Card type | Current cap | New cap |
|---|---|---|
| Domestic consumer credit | 0.8% | 0.3% |
| Domestic commercial credit | 0.8% | 0.8% (unchanged) |
| Domestic debit and prepaid | 10c or 0.2% | 8c or 0.16% |
| Foreign-issued cards (all types) | Unregulated | 1.0% from 1 April 2027 |
Two things to note: Commercial credit cards keep the higher 0.8% cap, the RBA left it there deliberately, to stop American Express taking even more of the business card market. And foreign-issued cards are the sleeper issue: they’re only about 3% of card transactions in Australia but account for roughly 20% of the interchange merchants pay.
The RBA’s own numbers put the total saving to merchants at around $910 million a year, with small businesses gaining the most because they typically sit at or near the current caps while large merchants negotiate strategic rates well below them.
Card networks must publish their interchange and scheme fees quarterly. Acquirers processing more than $10 billion in Australian card transactions a year must publish what they actually charge merchants, broken down by merchant size and card type. First publications are due by 30 October 2026, covering the July–September quarter which are deliberately a pre-reform period so you can see the before-and-after.
Acquirers also have to publish a measure of how much of the interchange reduction they’ve actually passed through, for the first four quarters from October. First one due 30 January 2027.
That’s the bit worth diarising. It’s the difference between assuming your provider passed on the savings and being able to check.
Cafes, restaurants, fast food, retail, tradies, petrol stations, salons, accommodation, bottle shops, anywhere there’s a surcharge line on a terminal, receipt or invoice.
If you’re one of the roughly 16% of Australian merchants currently surcharging, this is the change that hits you most directly. Worth knowing that 85% of small merchants and 89% of large merchants don’t surcharge at all, so this is a minority position, not the norm.
From October, that surcharge line disappears. You’ve got two realistic options.
Build the cost into your prices. This is what the RBA expects most surcharging merchants to do, and it’s the simplest path. Your $9 coffee becomes $9.20. Your callout fee nudges up. Customers see one number, no surprises at the counter, and you stop having the “why am I being charged extra” conversation. The RBA’s modelling suggests the aggregate price effect across the economy is about 0.1% – a small, one-off adjustment, because consumers are already paying these costs, just in a different form.
Absorb it and let the lower interchange offset the cost. If your volumes and margins allow, the interchange reduction may cover most of what you were recovering through surcharges, especially if you’re a smaller business sitting near the current caps. Run the numbers on your last three merchant statements before you decide. Don’t guess.
Either way, sort these before October:
The surcharge ban applies to card-not-present transactions in exactly the same way as in-person ones. Some merchants argued during consultation that online should be treated differently, given disclosure is clearer and the price signal stronger at an online checkout. The RBA rejected it and it’s concern was that a CP/CNP split would create perverse incentives where merchants and providers could push customers into app or online payment precisely because those could still be surcharged.
So whatever applies in store applies at your checkout.
If you’re running Stripe checkout, WooPayments through WooCommerce, Shopify Payments, or selling via eBay’s managed payments, the surcharge ban applies to you the same way it applies to an EFTPOS terminal in a shop. It doesn’t matter which gateway or platform is processing the transaction. If the underlying card is on the eftpos, Mastercard, Visa or Amex network, you can’t add a surcharge to recover your processing costs from 1 October 2026.
Practically, that means checking each platform’s settings individually:
Worth being clear that this is separate to the platform’s own fees. Stripe’s percentage, Shopify’s transaction fee, eBay’s final value fee – none of that changes. Those are fees for a service provided to you, and the RBA has confirmed they aren’t surcharges. It’s specifically the extra amount added on top of the sale price, charged to your customer for paying by card, that has to go.
If you’re not sure whether a fee you’re passing on counts as a surcharge under the new rules, check with your platform or provider directly before October. Enforcement runs through the card networks and your merchant agreement rather than a government regulator, so your acquirer is the one who can give you a straight answer about your specific setup.
Recurring billing and subscriptions. If you run memberships, retainers, subscription billing or recurring bookings with a surcharge component baked into the invoice logic, that needs updating in the same window. Subscription systems are the ones most likely to still be quietly applying a surcharge in November because nobody thought to look at them.
Refunds. The RBA specifically noted that consumers aren’t always refunded surcharges when they return a product and flagged it as a growing problem with online commerce. Once you’ve removed surcharging, your refund logic needs to reconcile cleanly against a price with the cost already built in. Worth a test transaction.
Foreign card fees are the bigger story for you. If you sell to international customers, or you’re a booking platform or tourism operator regularly processing foreign-issued cards, you’re currently paying interchange that isn’t regulated at all. The RBA estimates the weighted average sits around 1.75% of transaction value, compared with eligible issuer costs of roughly 0.31–0.57%. The new 1.0% cap doesn’t land until 1 April 2027, six months after the domestic changes, because the RBA accepted that multi-jurisdiction implementation needed longer. Don’t assume this is sorted alongside everything else in October.
Accommodation operators, read this one twice. The RBA received evidence that some online travel booking platforms take payment from an Australian customer on a domestic card, then pay the Australian hotel using a foreign-issued virtual card – leaving the hotel paying foreign interchange rates on what was economically a domestic transaction. The RBA named this practice as one reason it’s capping foreign interchange at all. If you take payments via OTAs, this is worth raising with your channel manager and looking for on your merchant statements from April 2027, when statements have to break out domestic versus foreign-issued cards.
This is where most of the confusion is going to sit, so worth being precise.
Still allowed after 1 October 2026:
Not covered by the reform at all: Diners Club, PayPal, and buy-now-pay-later products such as Afterpay and Zip sit outside the designated networks and outside Amex’s voluntary commitment. Their own scheme rules and existing law still apply. The RBA has flagged a further review commencing mid-2026 covering three-party networks, BNPL, mobile wallets and e-commerce platforms, so this position may not hold long. If you accept BNPL, keep an eye on that consultation.
Surcharging was introduced in 2003 to give consumers a price signal, so they’d choose cheaper payment methods. The RBA’s review found it’s stopped working.
Cash use has fallen from around 69% of in-person transactions in 2007 to roughly 15% in 2025, so most customers no longer have a fee-free way to pay. Meanwhile the prevalence of card surcharging has doubled since 2022. Only about 5% of merchants actually surcharge debit and credit at different rates: most apply one flat rate to every card, which sends no price signal at all.
The disclosure picture is worse. In an RBA-commissioned survey of 3,000 consumers, a large majority reported being told about a surcharge before paying only sometimes or rarely. Three-quarters said surcharging is unnecessary and should stop. Across designated networks, about $1.8 billion in surcharges is charged each year, $1.6 billion of it borne by consumers.
The RBA also modelled whether surcharging actually saves merchants money. Its analysis of over a million merchants found that a business processing $1 million in card payments saves roughly $36 a year from the behaviour change surcharging drives. Thirty-six dollars.
So the RBA’s position is that surcharging costs consumers $1.6 billion to deliver a price signal that barely moves anything and that the interchange cuts are the compensating mechanism for merchants.
It’s worth saying plainly that not everyone agrees this nets out well for business owners. Merchant groups and hospitality operators pushed back hard during consultation, arguing it simply shifts cost recovery from a visible line item onto their margins, in a period of rising wages, rent and supplier costs. Some large merchants also noted they used the threat of surcharging as leverage in fee negotiations, and lose that. The RBA’s answer is that interchange cuts plus transparency should more than offset it for businesses that shop around. Honest read: how well it works out will vary by business and by provider, and the businesses that don’t check will do worst.
| Date | What happens |
|---|---|
| 1 October 2026 | Surcharging ends on eftpos, Mastercard, Visa and Amex. Domestic interchange caps drop (consumer credit 0.3%, debit 8c/0.16%). |
| 30 October 2026 | Card networks and large acquirers publish their first quarterly fee data (covering July–September 2026). |
| 30 January 2027 | Acquirers publish their first interchange pass-through measure, covering the first quarter under the new caps. |
| 1 April 2027 | 1.0% cap on foreign-issued card interchange takes effect. New detailed merchant statement requirements begin. Card networks publish scheme fee roadmaps. |
For most small businesses this is a good change, including for the ones currently surcharging. You lose a pricing lever, but you gain lower wholesale costs and, for the first time, real visibility into whether you’re being charged a fair rate.
The businesses that come out ahead will be the ones who use the next six weeks to audit their setup, understand what they’re actually paying, and reprice deliberately. The ones who wait until late September will be doing it under pressure, and probably still paying the same merchant service fee in December.
Source: Reserve Bank of Australia, Review of Merchant Card Payment Costs and Surcharging, Conclusions Paper, March 2026, and the RBA’s subsequent FAQs on the removal of payment surcharges. This article is general information, not financial or legal advice. Check your specific arrangements with your payment provider.
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