If you’ve ever paid a 1.5% surcharge at a café, a $1.20 booking fee on a ticket, or a card payment fee at the mechanic, that era is coming to an end. From 1 October 2026, surcharges on eftpos, Visa, and Mastercard debit, prepaid, and credit card transactions will no longer be permitted in Australia. The same reform package also lowers the caps on interchange fees for most domestic card transactions — the wholesale fees that sit between card issuers and acquiring banks. Understanding both changes, and what they do and do not cover, is the clearest way to prepare.

What is changing for card surcharges from 1 October 2026?

The RBA’s decision does two things simultaneously. First, it removes the regulatory requirement that previously prevented card networks like Visa and Mastercard from banning surcharges. From October, those networks can – and are expected to – impose “no surcharge” rules on Australian merchants. In practical terms, this means you will no longer be able to add a surcharge to customer card payments.

Second, and less discussed, the RBA is lowering the caps on interchange fees – the wholesale fees that card networks charge businesses to process payments. These caps are being reduced for consumer credit cards and debit cards, with the explicit goal of reducing the cost of card acceptance, particularly for small merchants who have historically paid rates at or near the regulatory cap.

According to the RBA’s Review of Merchant Card Payment Costs and Surcharging’ Conclusions Paper (March 2026), the modelling suggests that around 90% of small merchants will be better off under the new framework than the current one. But “better off overall” doesn’t mean every aspect of the change works in your favour, and the credit card rewards angle is one area worth paying close attention to.

How will surcharge ban affect my payment costs?

As reported by Inside Small Business, Prospa’s SME Sentiment Report (May 2026), conducted with YouGov, found that among the 62% of small businesses that accept card payments, 54% expect the surcharging ban to change how they set prices, yet only 43% fully understand what the change means for them.

For those businesses, the immediate operational question is: what do you do with the cost of card acceptance now that you can’t pass it on through a surcharge?

You have two main options. The first is to absorb the cost into your operating expenses and accept that card acceptance is simply a cost of doing business, like rent or insurance. Given that interchange fee caps are being lowered, the actual cost of acceptance should come down, making this approach more viable than it sounds. The RBA estimates the changes will save Australian consumers approximately $1.6 billion annually, which is money flowing from the payment system – not from your margin.

The second option is to potentially build card acceptance costs into your prices across the board. Many businesses in countries without surcharging do exactly this – pricing includes all payment processing costs, and customers pay the same price regardless of how they pay. Noting this is of course business-dependent, and you should always speak to a finance professional.

Before October, have a look at your current payment setup and understand your actual cost of acceptance for each card type – your merchant statement from your payment provider shows this – this will help make a decision about how to handle it going forward.

Will the surcharge ban make credit card rewards less valuable?

Credit card rewards – points, frequent flyer points, cashback – are partly funded by interchange fees. Higher interchange fees on rewards cards have historically generated more revenue for card issuers to fund those programs.

The key distinction here is that the interchange cap reduction applies to consumer credit cards (down from 0.8% to 0.3%), not commercial credit cards. The cap on domestic commercial credit cards stays at 0.8%. Business credit cards that sit under the commercial credit card category are therefore less directly exposed to the interchange reduction than consumer cards.

That said, the removal of surcharging – which previously allowed merchants to somewhat pass on the cost of premium rewards cards – combined with lower consumer credit card interchange, does put pressure on the overall economics of consumer-facing rewards programs. Card issuers in markets where interchange was capped earlier (including the U.K. and Europe) did reduce earn rates and the generosity of partner benefits over time as a result.

What to do before October?

The end of card surcharges is a genuine simplification of Australia’s payments system. For most small businesses, the combination of lower interchange fees and no surcharging complexity should be a net positive. But the flow-on effects for credit card rewards programs are real, and business owners who don’t factor this into their payment strategy could find themselves earning less from the same spending over time.

There are three practical things to clarify before 1 October 2026:

  1. Disable surcharging on your payment setup. Contact your payment service provider now to understand what changes they will make automatically and what you need to configure yourself – on terminals, in your payment gateway, and at any online checkout.
  2. Understand your current acceptance costs. Your merchant statement from your payment provider shows your cost of acceptance by card type. Review it now so you have a baseline to compare against once the new interchange caps take effect.
  3. Decide how to handle card acceptance costs in your pricing. Without the ability to apply a surcharge, card acceptance becomes a cost absorbed into your operating expenses or built into your prices. Either approach is valid; the important thing is to make a decision that works best for your business.