For more than two decades, the little line on the receipt — “1.5% card surcharge applies” — has been a fixture of Australian retail. In less than a month, it disappears. From 1 October 2026, businesses will no longer be able to add a surcharge to payments made on eftpos, Mastercard or Visa debit, prepaid and credit cards. The Reserve Bank has called it the most significant overhaul of card-payment rules in more than twenty years, and the clock is now measured in weeks, not quarters.
If you accept cards, this is not a “watch this space” story. It is a repricing event that lands on a fixed date, and the businesses that thrive through it are the ones treating September as a preparation window rather than a surprise.
What actually changes on 1 October
Two things move at once, and it is worth keeping them separate in your head.
First, the surcharge ban. You will no longer be permitted to pass the cost of accepting eftpos, Mastercard or Visa payments on to the customer as a separate line item. The price on the shelf becomes the price at the terminal, regardless of how the customer chooses to pay.
Second, and easy to overlook, the Reserve Bank is simultaneously cutting interchange fee caps — the wholesale fees baked into every card transaction. This is the mechanism designed to stop the ban from simply transferring cost from consumers to small businesses. Lower interchange means the underlying cost of acceptance falls at the same moment surcharging ends.
By the numbers:
- Australians currently pay an estimated $1.6 billion a year in card surcharges — all of it eliminated from 1 October.
- Lower interchange caps are projected to save merchants around $910 million a year, with proportionately larger benefits for small businesses that today pay fees closest to the existing caps.
- A second wave lands on 1 April 2027: caps on foreign-issued card interchange, plus new transparency rules forcing schemes and large acquirers to publish clearer fee information.
Why the RBA did this
The Reserve Bank’s diagnosis was blunt: surcharging had stopped doing its job. It was meant to send a price signal — pay less if you choose a cheaper payment method — but in practice most consumers cannot tell a debit tap from a credit tap at the terminal, blended surcharges bundled expensive and cheap cards together, and enforcement of “no more than cost” was patchy at best. The result was a system where the signal was noise, and the surcharge had quietly become a margin line for some operators rather than a genuine cost pass-through.
Rather than police thousands of individual surcharge levels, the RBA chose to remove the mechanism and attack the underlying cost instead. It is a bet that lower wholesale fees, applied uniformly, do more for competition than a surcharge most people ignore.
The 30-day merchant checklist
Here is where the rubber meets the road. If you run or advise a business that takes cards, work through this before 1 October.
1. Decide your new shelf price now
If you have been surcharging 1.5%, that revenue does not vanish into thin air — but neither can it stay on the receipt. Model whether you absorb it, rebuild it into headline prices, or a mix. Do the maths against your actual post-October merchant service fee, not today’s, because interchange is falling too. Many small merchants will find the absorbed cost is smaller than the surcharge they were charging.
2. Confirm least-cost routing is switched on
Least-cost routing (LCR) sends contactless debit payments down the cheapest network — usually eftpos. With surcharging gone, LCR becomes your single biggest lever on acceptance cost. Ring your acquirer and confirm it is enabled and configured for in-store, online and mobile. If you do not ask, you may not have it.
3. Reprogram terminals and update receipts
Any surcharge logic in your POS or payment terminal must be turned off. Check that receipts, invoices and online checkouts stop displaying surcharge lines. Leaving a stale surcharge running past 1 October is both a compliance risk and a customer-trust problem.
4. Fix your signage and website
“A surcharge applies to card payments” signs come down. Booking flows, quote templates and any “prices exclude card fee” copy need editing. This is the unglamorous part everyone forgets until a customer screenshots it.
5. Have the conversation with your acquirer
Ask three questions: what will my blended rate be after the October interchange cut; is LCR active on every channel; and are there plan changes that would suit a business that no longer surcharges? This single call is the highest-value hour you will spend in September.
What is coming next
The 1 October changes are not the end of the review. The Reserve Bank has flagged further consultation on the parts of the ecosystem left untouched this round — mobile wallets, three-party networks like American Express, buy-now-pay-later surcharging, and the fees charged by e-commerce platforms. In other words, the surcharge conversation is migrating from the terminal to the wallet. Anyone building a payments strategy for 2027 should assume the scrutiny keeps widening.
There is a compliance edge to this too. Once the ban takes effect, continuing to surcharge a designated card is not a grey area — it is a breach, and the ACCC has consistently signalled that misleading surcharge practices are an enforcement priority. A business still charging 1.5% in mid-October is not clever; it is exposed. The reputational cost of a customer discovering a banned surcharge on their receipt may outweigh the fee itself.
For now, the message is simple. The surcharge era in Australia ends on 1 October. The businesses that come out ahead are the ones that priced for it in September — not the ones who found out from an annoyed customer on the second of the month.
Found this useful? Forward it to the business owner who is still surcharging 1.5% and hasn’t done the maths yet — they have 30 days. Share this article and help the industry get October right.