Australia’s Card Surcharge Ban Begins as Businesses Warn of Possible Price Rises

Australia’s ban on separate surcharges for most debit and credit card payments took effect on October 1, ending an extra checkout fee that customers often faced when paying by card. The Reserve Bank of Australia (RBA) said the change is intended to make prices clearer and address surcharge rules that had become difficult for consumers to understand and compare.

The new card-network rules cover eftpos, Visa and Mastercard credit, debit and prepaid cards. American Express, UnionPay and PayPal have also announced that they will remove surcharges under their own arrangements. The RBA’s reform allows the networks to prohibit merchants from adding a separate fee because a customer paid by card.

Businesses weigh the cost of accepting cards

The change has raised concerns among some business owners, who say the fees they pay to process card transactions have not disappeared. Under the new arrangements, businesses may account for payment costs in their general prices instead of adding a separate card fee at checkout.

Reuters reported that some Australian businesses had raised prices or expected to do so after the change. A Sydney café owner said prices for some food and cold drinks had increased, while hospitality representatives warned that businesses operating on narrow margins could face added pressure. The RBA estimates that the overall effect on measured consumer prices will be small, at around 0.1%, although the impact will vary between businesses and customers.

The government and the RBA argue that ending surcharges will make the amount customers see more closely match what they pay. The RBA also says its wider reforms—including lower caps on some domestic interchange fees—are expected to reduce costs for businesses. The practical effect will depend on how merchants adjust their prices and whether savings from lower payment fees are passed on.

The change applies to fees added specifically because a customer paid by card. It does not automatically remove weekend or public-holiday surcharges, booking fees or service fees that apply regardless of payment method. Customers who believe a business has incorrectly added a card surcharge can raise the issue with the business or the relevant card network.

A separate issue has emerged around Australian Taxation Office payments. On October 9, Treasurer Jim Chalmers announced a delay to the ATO’s planned move to stop accepting credit-card payments for tax bills, following objections that some small businesses use credit cards to manage cash flow. That decision concerns how the tax office accepts payments; it is distinct from the nationwide ban on merchants adding card surcharges.

For consumers, the immediate change is straightforward: most businesses can no longer add a separate surcharge for covered card payments. Whether that leads to lower overall costs will depend on future pricing decisions, merchant fees and how the new rules are enforced.