Australia Bans Card Surcharges From October 1: What Changes at Checkout

Australia’s Reserve Bank has banned card surcharges effective October 1, 2026, ending a 23-year practice that let retailers pass payment processing costs to customers. Debit cards now account for 49% of all payments, credit cards 23%, and cash just 15%. Retailers face two choices: absorb the costs themselves or build them into prices for all customers, potentially raising prices across the board.

What the ban covers and when it starts

From October 1, businesses cannot add surcharges when customers pay with debit cards, credit cards, EFTPOS, or prepaid cards. Visa, Mastercard, and EFTPOS networks are covered. American Express is voluntarily joining the ban. The change follows a lengthy Reserve Bank review and decision to remove surcharging from all designated card networks.

Current card payment costs vary by type: EFTPOS debit cards cost businesses 0.43%, Visa or Mastercard credit cards about 1%, and American Express up to 1.36%. Without the ability to pass these costs to customers, retailers must find another solution.

How retailers are preparing

A snap poll of over 600 businesses revealed 17% remain unprepared for the ban, while 65% confirmed they are ready. Some retailers have already taken action. A Western Sydney burger store posted a sign stating it will accept only cash or Pay ID from October 1. South Australian pub owner Simone Douglas is considering going cash-only at her two venues to counter the cost burden.

Others are exploring cash discounts. A Sydney vegan bakery owner posted to customers asking whether they would prefer a small surcharge on cards, higher prices for everyone, or cash discounts. One business owner reported already implementing a 5% cash discount programmed into the till. Sydney hospitality operator Steve Sidd, who runs more than 20 venues, said all businesses will now have to build payment processing costs into their prices.

Who will pay the real cost

Shoppers who regularly use cash can expect the biggest difference, since they currently avoid surcharges. Cash accounted for around 15% of consumer payments in 2025, but is used for almost one in four purchases under $10. If retailers pass costs on to customers through higher prices, cash users will pay more even though they avoid card fees.

The Australian Restaurant and Cafe Association called the ban one of the largest changes in payments in Australia’s history, with many small businesses unprepared for its arrival. One cafe owner noted that 1.5% surcharges per transaction add up to a scary number across thousands of sales.

What businesses must do before October 1

Retailers must review where they apply surcharges across EFTPOS terminals, point-of-sale systems, invoicing software, and online payment platforms. They should contact their merchant service provider to confirm required system changes and complete updates before the deadline.

Businesses must also remove surcharge information from menus, websites, booking systems, invoices, and other customer-facing materials. Staff need training to explain the changes clearly. Any price increases must not mislead customers about the reason for the change.

Final Thoughts

The October 1 surcharge ban forces Australian retailers to choose between absorbing payment processing costs or raising prices for all customers. Early signs show some businesses pivoting to cash-only or cash discounts, while most will likely embed costs into higher prices.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.