The end of credit card surcharges: Are you raising prices?

Key takeaways:

With card surcharges banned, many businesses may need to absorb processing costs or adjust prices to protect margins.

Broader payment system reforms aim to reduce fees, improve transparency, and modernise Australia's payments landscape.

Shoppers will see more consistent checkout pricing, though payment processing costs may still be passed on indirectly through higher prices or reduced payment options.

AUTHORS

On October 1 2026, businesses across Australia were officially banned from adding credit card surcharges to customer transactions.

The Federal Government has stated the move will save consumers roughly $1.6bn in collective surcharge payments, after it was first announced in late March 2026 following an 18-month review into retail payments regulation and merchant card costs by the Reserve Bank of Australia.

It is just one part of larger payment system reforms, which also include plans to:

Cap fees that banks can charge each time a card payment is processed
Require banks to be more transparent about the fees they charge for card payment services
Extend the Reserve Bank's powers to cover digital wallets, buy now pay later providers and card schemes such as American Express
Introduce a new licensing framework for payment providers
Manage the gradual phase-out of cheques
Put in place a strategic plan for the payment system's future.

Is your pricing strategy keeping up with rising costs?

With credit card surcharges now banned, businesses may need to rethink how they manage payment processing costs.

Businesses raising prices

With average merchant fees sitting between 1.1% and 2.5% of the value of a transaction, a business processing $1m in annual card sales could be paying fees of $20,000 or more every year. For sectors where profit margins are already thin, this would be a difficult added cost to absorb.

It is unsurprising then that many businesses are responding by increasing the cost of products and services across the board. While most increases will be modest, implementing them isn’t always as simple as adding a few cents to every price. Business owners will need to weigh customer expectations and competitive pressures, alongside impacts to margins.

Additionally, as higher business costs are reflected in pricing, this could contribute to broader inflationary pressures over time which may then have flow-on effects for interest rates.

We may also see banks looking to raise the cost of products and services in an attempt to recoup revenue lost due to capped fees.

Consumers in the middle

When the policy was first announced it was a welcome relief for many consumers who have long struggled to understand the reason for surcharge variations between eftpos, Visa, Mastercard and American Express (Amex).

From October 1, they can choose to pay with any card and expect the amount at the terminal to match the final price on the checkout screen. However, customers may find that more businesses choose not to accept certain card providers, such as Amex, due to their higher processing costs.

Moving forward, it will be interesting to see the wider impact of these reforms. Ultimately, the surcharge may be disappearing from the receipt but the cost of processing payments is not. How those costs are absorbed, shared or passed on will likely take some time to play out.

If your business is facing rising costs and would benefit from a pricing review and strategic discussion, please contact the business advisory team at your local RSM office.