On 31 March 2026, the Reserve Bank of Australia confirmed the most significant change to Australia’s payment system in over 20 years: card surcharges on eftpos, Visa, and Mastercard transactions will be banned from 1 October 2026. If your business currently surcharges card payments, this affects you directly. Here is what is changing, why it matters, and how to prepare.
What Is Changing?
From 1 October 2026, Australian businesses will no longer be permitted to add a surcharge to card payments made using eftpos, Visa, or Mastercard — whether debit, prepaid, or credit. This means the extra 1-2 per cent fee that many businesses currently add at the checkout will be gone. The ban applies to all businesses processing card payments in Australia, regardless of size, industry, or payment provider.
The surcharge framework was introduced over 20 years ago to encourage consumers to choose more efficient payment methods (essentially, to incentivise cash). But with cash usage dropping to just 13 per cent of all payments, and the vast majority of Australians preferring card or contactless, the RBA has concluded that surcharging is no longer achieving its original purpose. Instead, it has become a source of confusion and frustration for consumers and businesses alike.
Why Is the RBA Doing This?
The RBA’s review found three key problems with the current surcharging system. First, consumers find surcharges complex and confusing — only 13 per cent of consumers surveyed said they are always told about surcharges before paying. Second, many businesses surcharge all card types at the same rate, regardless of the actual cost difference between debit and credit transactions, which undermines the pricing signals surcharging was meant to provide. Third, 76 per cent of consumers in the RBA’s survey said they want surcharging to stop.
What About Interchange Fees?
The RBA has paired the surcharge ban with reductions to interchange fee caps — the wholesale fees that merchants pay to card issuers through their payment provider. These reductions are estimated to save Australian merchants approximately $910 million per year collectively, with proportionally larger benefits for small businesses that typically pay closer to the current fee caps. The interchange fee reductions take effect on 1 October 2026, the same day as the surcharge ban.
Additional changes follow in April 2027, including caps on foreign-issued card interchange fees and improved fee transparency requirements for card networks and payment providers.
How Should Merchants Prepare?
1. Review Your Current Payment Costs
Contact your payment provider (or call BuzzPay on 1300 289 972) to understand your current per-transaction costs. Know exactly what you are paying in interchange fees, scheme fees, and processor margins. This baseline is essential for planning your pricing response.
Model the Impact on Your Margins
If you currently surcharge, calculate how much revenue that surcharge generates and compare it with the expected interchange fee reductions. For many small businesses, the fee reductions will partially offset the lost surcharge revenue — but not entirely. You may need to adjust your menu or shelf prices to absorb the remaining cost.
Talk to Your Payment Provider
The interchange reductions mean your provider should be passing lower costs through to you. If they are not, it may be time to switch. BuzzPay’s transparent pricing means you always know what you are paying and why — no buried fees, no complex rate tables.
Update Your POS and Terminal Settings
If your terminal or POS system currently applies automatic surcharges, these will need to be disabled before 1 October 2026. Contact your provider to schedule this change.
What Payments Are Not Covered?
The ban applies to eftpos, Visa, and Mastercard transactions. Payments made through other networks — such as American Express — are not currently covered under this ban. The RBA has flagged that it will consult on extending regulation to three-party card networks, mobile wallets, buy-now-pay-later services, and e-commerce platforms in mid-2026.
