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Australia bans credit card surcharges

Australia bans credit card surcharges

Rule Changes

Businesses can no longer add a checkout fee for Visa, Mastercard, eftpos or American Express payments

October 30th, 2026: Networks must publish card fee data

Overview

Updated Oct 21

Businesses have not been able to add a card surcharge since 1 October, when the ban took effect for Visa, Mastercard, eftpos and American Express. Some are recovering the cost through prices instead: coffee tracker Small Flat White found 17 per cent of cafes have raised prices since the ban began, by an average of 50 cents.

The Australian Taxation Office reversed its plan to stop accepting credit card payments after Treasurer Jim Chalmers intervened on 9 October, extending acceptance to 30 June 2027. On 20 October, the Reserve Bank's head of payments defended the ban, saying shoppers benefit from paying the advertised price. A survey of 253 small businesses by lender OnDeck Australia found 44 per cent plan to raise prices to cover card costs.

Why it matters

The $1.6 billion Australians paid in card surcharges is shifting into prices, and early evidence shows some increases exceed the fee itself.

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Key Indicators

0.16%
New debit and prepaid interchange cap, down from 0.2%
Cap on domestic debit and prepaid card interchange fees, cut from 0.20% to 0.16% from October 1.
17%
Cafes that raised prices after the ban
Share of more than 1,500 cafes tracked by Small Flat White that raised prices after 1 October. The average rise was 50 cents, more than 10 per cent, against a typical 1.5 per cent card surcharge.

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People Involved

DB
David Bitton
Owner, Bitton Rose Bay cafe, Sydney
Estimated the ban could cost his business up to $40,000 a year

Organizations Involved

Reserve Bank of Australia
Reserve Bank of Australia
Central bank
Conducted the review that led to the ban

Australia's central bank, which regulates card payment systems and drove the no-surcharge policy change.
Australian Competition and Consumer Commission
Australian Competition and Consumer Commission
Consumer and competition regulator
Monitoring new fees that may replace card surcharges; does not enforce network no-surcharge rules

Australia's consumer and competition regulator, which warns against new charges that act as card surcharges under another name but does not enforce networks' no-surcharge rules.
Australian Chamber of Commerce and Industry
Australian Chamber of Commerce and Industry
Business lobby group
Critic of the ban; argues costs will still reach consumers

Business lobby group that disputes the RBA's savings estimates and argues costs will be passed on anyway.
VM
Visa, Mastercard, eftpos and American Express
Card payment networks
Introduced no-surcharge rules effective October 1, 2026

The four card networks that imposed no-surcharge rules on merchants accepting their cards in Australia.
Australian Taxation Office
Australian Taxation Office
Government agency
Will keep accepting credit card payments until 30 June 2027 after Treasurer intervention

Australia's tax collector, which will keep accepting credit card payments until 30 June 2027 after the Treasurer extended its original deadline.

Timeline

March 2026 April 2027

14 events Latest: October 30th, 2026 · 1 week ago Showing 8 of 14
Tap a bar to jump to that date

  1. International card interchange caps begin

    Upcoming Regulatory

    Interchange fee caps extend to foreign-issued cards acquired in Australia, and detailed merchant statements become mandatory.

  2. Acquirers report interchange flow-through

    Upcoming Regulatory

    Large acquirers begin publishing how reductions in interchange fees flowed through to merchant service fees.

  3. Networks must publish card fee data

    Latest Regulatory

    Card networks and large acquirers begin publishing specified information about card payment fees on their websites.

  4. RBA payments chief defends surcharge ban

    Regulatory

    The Reserve Bank's head of payments said consumers benefit from paying the advertised price for goods and services.

  5. Cafe price rises exceed the card fee they replaced

    Business

    Small Flat White found 17 per cent of more than 1,500 cafes had raised prices since the ban, by an average 50 cents, more than 10 per cent, against a typical 1.5 per cent surcharge. UBS economist Stephen Wu said merchants may be using the change as cover.

  6. Treasurer extends ATO credit card deadline to June 2027

    Regulatory

    Treasurer Jim Chalmers called the ATO's plan to stop accepting credit cards by 30 November inadequate and extended acceptance to 30 June 2027.

  7. ATO meets small business over credit card ban

    Regulatory

    The tax office convened a snap meeting with small business representatives to discuss the impact of stopping credit card payments.

  8. PayPal no-surcharge rule takes effect

    Regulatory

    PayPal applies its own no-surcharge rule, following the networks' ban that began October 1.

  9. Cafes raise menu prices to absorb card costs

    Business

    Some cafes have raised menu prices to recover card processing costs, after the surcharge ban took effect October 1.

  10. ACCC flags possible disguised card surcharges

    Regulatory

    The consumer watchdog says it is aware of concerns about new 'platform,' 'booking' or 'service' fees that may act as card surcharges under another name.

  11. ATO to stop accepting credit card payments

    Regulatory

    The Australian Taxation Office announced it will stop accepting credit card payments by the end of November because card companies will not offer a low enough rate. Commissioner Rob Heferen said the ATO would have preferred to continue accepting credit cards.

  12. Card surcharge ban takes effect

    Regulatory

    Businesses can no longer add surcharges for Visa, Mastercard, eftpos or American Express card payments. Lower interchange caps also begin for domestic transactions.

  13. Flexischools folds card costs into fees

    Business

    The school payments platform tells families it will fold card processing costs, previously covered by surcharges, into its service fees.

  14. RBA concludes surcharging review

    Policy

    Reserve Bank publishes its conclusions paper, announcing it will remove its no-surcharge prohibition and cut interchange fee caps.

Scenarios

1

Card costs end up baked into prices across Australian retail

Likely Resolves by Q2 2027

Discussed by: ACCI and business owners interviewed by ABC News and SBS News

Businesses that relied on surcharges to recover processing fees fold those costs into product prices. Cash payers end up subsidising card payers, and retailers face pressure from price-sensitive customers. ACCI argues the costs will reach consumers either way, just less transparently.

2

Workarounds replace card surcharges with new fees

Likely Resolves by Q1 2027

Discussed by: ABC News reporting on businesses finding workarounds; SBS News

Businesses raise weekend or public holiday surcharges, add booking or service fees, or adjust pricing within the rules, which still allow non-card fees. Early sign: the Bitton Rose Bay cafe in Sydney raised its weekend fee from 10 to 12 percent to recover card costs.

3

Merchant fee competition drives card costs down

Possible Resolves by Q2 2027

Discussed by: RBA; bank commentary reported by AAP News

The RBA expects lower interchange caps and mandatory fee disclosure to push acquirers to compete on merchant pricing. Early moves: Commonwealth Bank cut its merchant rate to 0.99 percent and Westpac to 0.79 percent. If the competition holds, the cost businesses absorb is smaller than the surcharge they used to collect.

4

Regulators or card networks crack down on disguised surcharges

Possible Resolves by Oct 1, 2027

Discussed by: ACCC, after flagging concerns about new platform, booking and service fees

The ACCC says whether a charge is genuine or amounts to a 'card payment surcharge by another name' depends on what it covers and how it operates. The card networks and payment providers police the no-surcharge rule, so a crackdown could follow if new fees simply replace the banned surcharge.

5

Surcharge ban becomes cover for larger price rises

Possible Resolves by Q2 2027

Discussed by: UBS economist Stephen Wu and Guardian analysis of cafe pricing

Cafes and restaurants raise prices by more than the card fee they used to collect. Small Flat White found the average coffee rise was 50 cents, more than 10 per cent, against the typical 1.5 per cent surcharge, and UBS's Stephen Wu said resilient demand and high inflation may let merchants pass on bigger increases.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

January 2018

UK and EU card surcharge ban (January 2018)

The UK banned surcharges on most consumer debit and credit card payments in January 2018, implementing the European Union's Payment Services Directive 2. Merchants could no longer add a checkout fee for paying by card.

Then

Card surcharges disappeared from UK consumer checkout flows; merchants absorbed costs or raised prices.

Now

The UK and European Economic Area approach became the reference point for jurisdictions weighing similar bans.

Why this matters now

Australia's ban follows the same model; the Straits Times notes the new policy brings Australia in line with the UK and the European Economic Area.

July 2013

US court settlement allowing card surcharges (2013)

A federal class action settlement over card interchange fees let US merchants add surcharges for credit card payments, after Visa and Mastercard dropped their no-surcharge rules for settling merchants. A number of states still prohibit the practice.

Then

Surcharging became legal in most US states, subject to caps and disclosure rules.

Now

The US moved in the opposite direction from the UK and Australia, permitting and disclosing the fee rather than folding it into prices.

Why this matters now

It shows the alternative policy answer to the same problem of rising card costs, and explains why Australia's ban is not the only regulatory option.

Sources

(22)
+16
Reserve Bank of Australia Australian Government business.gov.au Australian Competition and Consumer Commission ABC News SBS News AAP News The Straits Times ChannelNews Information Age — ACS Real Commercial Canstar The Guardian The Age Surcharge.com.au blog Inside Small Business Australian Financial Review RetailBiz SBS News ABC News The Guardian AAP News ABC News