Zero cost EFTPOS — also called no-fee EFTPOS or free EFTPOS — is a pricing model where the merchant pays no transaction fees. Instead, the cost of processing card payments is passed directly to the customer through an automatic surcharge added at the point of sale. It sounds like a dream for business owners, but there are important nuances and, as of 2026, a regulatory change that fundamentally affects this model.
How Zero Cost EFTPOS Works
Under the zero-cost model, when a customer taps their card, the terminal automatically adds a surcharge (typically 1.0-1.8 per cent) to the transaction total. The customer pays the surcharge, the provider deducts its processing fee from the surcharge amount, and the merchant receives the full sale price with no fee deducted. Providers offering this model include Smartpay, PayNuts, and Shift4. Some require minimum monthly transaction volumes — typically $10,000+ per terminal.
The Pros
Predictable cash flow: your revenue from each sale is exactly what you charge, with no percentage deducted. Simpler accounting: no reconciliation of transaction fees against sales. Lower payment processing costs: effectively zero, if the surcharge covers the full fee.
The Cons
Customer experience: many customers dislike surcharges, particularly on small transactions. A $4.50 coffee becoming $4.57 creates friction. Disclosure requirements: Australian consumer law requires surcharges to be clearly disclosed before the customer commits to the purchase. Minimum volume requirements: most zero-cost providers require $10,000+ monthly turnover per terminal. Competitive disadvantage: if your competitor does not surcharge and you do, price-sensitive customers may switch.
The October 2026 Surcharge Ban — The Game Changer
On 31 March 2026, the RBA confirmed that card surcharges on eftpos, Visa, and Mastercard will be banned from 1 October 2026. This means the zero-cost EFTPOS model in its current form will no longer be viable after that date. Providers that rely on surcharging will need to transition their merchants to a standard fee model.
If you are currently on a zero-cost plan, start planning now. Review what your provider charges under a standard pricing model. Compare with providers like BuzzPay that have always offered transparent, competitive rates without relying on surcharging. Call 1300 289 972 for a free cost comparison.
Alternatives to Zero Cost EFTPOS
Instead of passing costs to customers through surcharges, most businesses absorb transaction fees as a cost of doing business — just like rent, wages, and utilities. The key is to minimise those fees through competitive rates, Least Cost Routing, and choosing a provider that does not add hidden charges. BuzzPay’s transparent pricing means you always know what you are paying, and our competitive rates are designed to keep your payment costs as low as possible.
