Card surcharges banned from October 1: What Australians will pay instead

From October 1, Australian businesses must stop charging card surcharges, following a Reserve Bank decision that ends a 23-year-old practice. The ban affects debit, credit, EFTPOS, and prepaid cards. Businesses will either absorb payment processing costs or raise prices for all customers. The change will reshape how Australians pay, with cash users potentially facing the biggest price increases.

Why the ban is happening now

Card payments now dominate Australian spending. Debit cards account for 49% of all payments in 2025, credit cards 23%, while cash dropped to 15%. When the Reserve Bank first allowed surcharges in 2003, cash made up 69% of transactions. The RBA reviewed the rule and decided surcharges no longer reflect the true cost of card processing. The ban removes surcharging from all designated card networks including EFTPOS, Mastercard, and Visa. American Express is voluntarily joining the change.

What businesses currently charge for card payments

Processing costs vary by card type. EFTPOS debit cards cost businesses 0.43%, Visa or Mastercard credit cards cost about 1%, and American Express costs up to 1.36%. Without the ability to add surcharges, business owners face two choices: absorb the remaining cost themselves, or build those costs into higher prices for all shoppers regardless of payment method. The Australian Restaurant and Cafe Association called this “one of the largest changes in payments” in Australia’s history, noting many small businesses are unprepared.

Who will pay the most under the new rules

Cash users will likely see the biggest price increases. Cash is used for almost one in four purchases under A$10, yet accounts for only 15% of total payments. If businesses raise prices to cover card processing costs, cash customers will pay those higher prices without having used a card. Banks are also cutting credit card rewards and raising annual fees to offset lower interchange caps. ANZ has cut headline bonuses on Qantas cards and introduced points caps from 28 October 2026.

Banks reshape credit card offerings

Major Australian banks are restructuring card products ahead of the October 1 deadline. ANZ is cutting cashback offers and implementing monthly points caps of A$25,000 or A$50,000 per statement. The bank is also slashing insurance benefits, with Rewards Platinum and Black cards losing domestic and international travel insurance from 9 December 2026. American Express has not announced significant product changes and is voluntarily following the RBA’s new rules to remain competitive.

Final Thoughts

The surcharge ban reshapes Australian payments from October 1. Shoppers using cash or credit cards face hidden price rises or higher fees, while debit card users may see the smallest impact. Expect widespread price adjustments across retail, hospitality, and services.

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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.