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From 1 October 2026, card surcharges on Visa, Mastercard and eftpos transactions will be banned in Australia. The Reserve Bank published its final decision on 31 March 2026, and for small and medium-sized businesses, the question is no longer whether this is happening — it's how to stay profitable when you can no longer pass card fees on to customers.
This guide covers what the ban actually means, which costs you'll absorb, and what you can realistically do to protect your margins before October.
What the RBA Actually Decided
On 31 March 2026, the RBA published its Conclusions Paper on merchant card payment costs, ending an 18-month review. Three things come out of it.
Surcharges are gone. From 1 October, no business can add a surcharge to a card transaction on the Visa, Mastercard or eftpos networks — debit, credit and prepaid are all included. Payment providers are required to strip surcharging functionality from their terminals and software before the deadline.
Interchange fees are dropping. The consumer credit interchange cap falls from 0.8% to 0.3% on the same date. These are the wholesale fees your payment provider pays to the card-issuing bank — and in theory, some of that saving should flow through to the rates you pay. Whether your provider actually passes it on is a separate question, and one worth asking directly. The RBA estimates the combined reforms will save consumers and businesses up to $1.6 billion per year.
Transparency requirements are coming. From April 2027, acquirers will be required to publish data showing how much of the interchange reduction they've passed through to merchants. Until then, you'll need to push for that information yourself.
The ban covers eftpos, Visa and Mastercard only. It doesn't apply to cash, BPAY, PayPal, American Express or PayID. AMEX and Diners Club will be reviewed separately in a mid-2026 consultation.
Who's Most Exposed?
The businesses hit hardest will be those that:
- Operate on tight margins — cafés, food trucks, market stallholders, ticketed events
- Process high volumes of small transactions, where 1–2% adds up fast
- Have treated surcharging as a reliable cost-recovery mechanism rather than building it into their pricing
- Are locked into providers with bundled rates that may not reflect the incoming interchange reductions
Square charges 1.6% per transaction. Tyro's terminal rental can add up to $348 a year before you've processed a single sale. Zeller charges 1.4% and has been competing aggressively on hardware cost. When the surcharge disappears, these rates don't — you just stop being able to recover them at checkout.
The Practical Response: Three Things Worth Doing Before October
1. Audit your current surcharge revenue first
Pull 12 months of transaction data and work out exactly how much you've collected in surcharges as a percentage of card revenue. For most SMBs this sits between 1 and 2% of turnover. That gap needs a dollar figure attached before you can plan around it.
2. Fold it into your pricing
Spread the absorbed cost across your prices, quotes or rate card. A small adjustment across your product range covers the gap and removes the separate line item at checkout entirely. Do this in August, not late September.
3. Push your provider on the interchange reduction
The interchange cap drops on 1 October. If you're on a bundled flat rate, your provider may absorb that saving rather than pass it through. Ask for a clear breakdown of interchange, scheme fees, and their margin. If they won't provide it, that's your signal to get alternative quotes.
The One Payment Method That Genuinely Avoids Card Costs
QR codes and payment links are useful operational tools — they let you collect payments without hardware, which matters for events, market stalls, and multi-location setups. But they're still card transactions underneath. Interchange still applies. They don't help you avoid the cost; they just change how you present the checkout.
PayID is different. It runs on the New Payments Platform — completely separate rails from the card networks the ban covers. When a customer pays via PayID using a mobile number, email or ABN, no card is involved, no interchange fee applies, and there's no chargeback risk. Settlement is near-instant, 24/7 including weekends and public holidays.
With over 27 million PayID registrations in Australia as of mid-2025, a meaningful proportion of your customers can already pay this way. For invoice-based payments, pre-event purchases, wholesale orders, or any sale where you can share your PayID details, it's a genuinely lower-cost rail.
The practical limitation: PayID requires the customer to initiate from their banking app, so it works better in some contexts than others. It won't replace card acceptance at a busy café counter. But for the right transaction types, it's the only realistic way to take the card cost out of the equation entirely.
What to Ask Your Payment Provider Right Now
- "Are you passing the interchange reduction through to my rate, and when?"
- "Do you support PayID natively, and what does it cost per transaction?"
- "What does my effective rate look like if you strip out surcharge revenue?"
The Bottom Line
The RBA surcharge ban is a structural shift, not a temporary inconvenience. The businesses that handle it well won't necessarily be the ones with the lowest card rate — they'll be the ones who got ahead of it: audited their costs early, adjusted their pricing before the deadline, and built payment infrastructure that isn't entirely dependent on passing card costs downstream.
For Australian merchants running events, managing multiple locations, or simply wanting predictable costs without lock-in, it's worth taking a fresh look at your payment stack before October arrives.
Pebl Pay is built for exactly this environment — flat rates, no monthly fees, no contracts, with Tap to Pay, payment links, and PayID all in one platform.
