Card Surcharges Are Ending on 1 October 2026: What Every Business Owner Needs to Know

For years, many Australian businesses have relied on card surcharges to recover the cost of accepting electronic payments.

That is about to change.

The Reserve Bank of Australia (RBA) has announced that from 1 October 2026, businesses will no longer be permitted to apply surcharges to payments made via Visa, Mastercard and eftpos networks. The change forms part of a broader reform package designed to simplify payments, improve price transparency and reduce payment costs for businesses and consumers.

For some businesses, this may seem like a significant hit to profitability. However, with the right planning, most businesses can absorb these costs without materially affecting their bottom line.

The key is understanding your numbers.

Why Is the Change Happening?

When surcharging was first introduced, it was intended to encourage consumers to choose lower-cost payment methods.

Today, card payments dominate the Australian economy and many consumers have little practical choice but to pay electronically. The RBA (Reserve Bank of Australia) concluded that surcharging has become confusing, difficult to understand and often unavoidable for consumers. As a result, card surcharges on Visa, Mastercard and eftpos transactions will cease from 1 October 2026.

The good news is that the reforms also include reductions in interchange fees and greater transparency around merchant costs, which should help lower payment acceptance costs for many businesses.

What Does This Mean for Your Business?

If you currently surcharge customers, you will need to find another way to recover these costs.

The first step is understanding the size of the problem.

Many business owners know they pay merchant fees but have never calculated their annual cost. Some payment gateways will have an option to log in and download an annual report of the fees.

Ask yourself:

• How much did merchant fees cost my business last year?
• What percentage of sales do those fees represent?
• Has my payment provider increased fees over time?
• Am I paying for services I no longer need?

For many small businesses, merchant fees represent between 0.8% and 2.0% of annual revenue. While this may seem small, it can significantly impact profitability if left unmanaged. Don’t wait – investigate how to mitigate an impact from these changes.

Five Ways to Recover Merchant Fees Without Surcharging

1. Review and Renegotiate Your Merchant Fees

Many business owners simply accept the rates offered by their payment provider.

This is a mistake.

The upcoming reforms are expected to increase fee transparency and make it easier for businesses to compare providers.

Now is the perfect time to:

• Review your merchant agreement
• Compare providers
• Negotiate lower rates
• Remove unnecessary monthly fees
• Review terminal rental costs

Even a small reduction can create thousands of dollars in annual savings.

2. Build the Cost Into Your Pricing

The reality is that merchant fees are simply another cost of doing business.

You don’t separately charge customers for rent, insurance, software subscriptions or electricity.

Merchant fees should be treated the same way.

A carefully planned price review across products and services can often recover these costs without creating customer resistance by rolling in a percentage to to all internal pricing models before declaring the total price to the customer.

For example:

• A café may increase menu prices by 10 to 20 cents on selected items.
• A trades business may incorporate payment costs into future quotations.
• A professional services firm may review annual fee increases.

Small changes across many transactions often produce better results than visible surcharges.

3. Improve Gross Profit Margins

One of the most overlooked ways to recover merchant fees is through operational improvement.

Ask yourself:

• Are we wasting stock?
• Are staff rosters efficient?
• Are we purchasing effectively?
• Are we monitoring gross profit regularly?

A one per cent improvement in gross profit can often generate more value than recovering merchant fees directly.

This is particularly true in hospitality, retail and trade businesses.

4. Encourage Lower-Cost Payment Methods

While surcharging may disappear, businesses can still offer convenient alternatives.

These may include:

• Direct debit
• Bank transfer
• BPAY
• Account payment arrangements

Many service-based businesses already use these methods successfully and at a lower cost than card transactions.

5. Increase Average Transaction Values

Merchant fees become less significant when customers spend more per transaction.

Consider:

• Product bundles
• Service packages
• Upselling opportunities
• Membership programs
• Maintenance agreements

Increasing average sale values can significantly reduce the percentage impact of payment processing costs.

The Businesses Most Likely to Be Affected

Businesses that currently rely heavily on surcharging may experience the greatest impact, including:

• Cafés and restaurants
• Hospitality venues
• Retail stores
• Trades businesses
• Service businesses accepting card payments onsite

However, businesses with strong pricing strategies and healthy margins are likely to adapt quickly.

The Bigger Opportunity

Many business owners see this reform as a new expense.

While we agree, we also see it as an opportunity to review your expenses and to better understand your profitability.

Businesses that know their numbers will be able to:

• Make informed pricing decisions
• Improve margins
• Negotiate supplier costs
• Review payment systems
• Strengthen cash flow

The businesses that thrive after 1 October 2026 will not necessarily be those with the lowest merchant fees.

They will be the businesses that understand their numbers and manage them proactively.

How Numbers Australia Can Help

At Numbers Australia, we help business owners understand the numbers behind their decisions.

Using our REPAIR. STABILISE. OPTIMISE™ framework, we can help you:

REPAIR

Review your existing financial history to Identify hidden costs, inefficiencies and profitability leaks.

STABILISE

Implement systems and reporting that provide visibility over your business performance.

OPTIMISE

Use accurate financial information to improve strategic decision-making.

The removal of card surcharges doesn’t have to reduce your profits.

With the right strategy, it can become an opportunity to strengthen your business.

Need Help Understanding the Impact?

Contact Numbers Australia to review your merchant fees, pricing structure and profitability before the changes take effect on 1 October 2026.

Business. Optimised.