Key Takeaways
Australia will remove card payment surcharges from October 2026 following the Reserve Bank of Australia's review of retail payments regulation.
Key Statistics
- Australia will remove card payment surcharges as part of the Reserve Bank retail payments regulation reforms.
- The changes are expected to take effect from October 2026.
- Businesses will no longer be able to add a separate surcharge for card payments.
- Payment processing costs will need to be incorporated into product pricing.
- Businesses should review payment costs, settlement timing and reconciliation processes before the changes take effect.
Australia’s payments landscape is about to change in a major way.
The Reserve Bank of Australia has announced that card payment surcharges will be removed across the payments system, affecting businesses that currently pass payment costs directly to customers.
For many small businesses, card surcharges have been used to recover merchant service fees charged by payment providers. Once the reform takes effect, businesses will need to absorb these costs within their pricing.
This guide explains:
- What the Reserve Bank decision means
- When the changes will take effect
- How payment costs may change for businesses
- What small businesses should review before October 2026
What the Reserve Bank of Australia Decided
The Reserve Bank of Australia conducted a review of retail payment regulation to assess how payment fees affect businesses and consumers.
The review concluded that card surcharges should be removed to simplify pricing and improve transparency in the payments system.
Key outcomes from the review include:
- Removal of card surcharges across the payments system
- Lower interchange fee caps for card networks
- Increased transparency around payment provider fees
- Implementation expected from October 2026
The Reserve Bank expects these changes to simplify payment pricing and reduce complexity at the point of sale.
Why Card Surcharges Are Being Removed
Card surcharges were originally introduced to allow businesses to pass payment processing costs to customers.
Over time, surcharging became widespread across many sectors including retail, hospitality and travel.
- Customers often encountered unexpected checkout fees
- Pricing became inconsistent across merchants
- Some surcharges exceeded actual payment processing costs
However, regulators observed several issues:
Removing surcharges aims to create clearer and more transparent pricing for consumers while improving the efficiency of the payments system.
What This Means for Small Businesses
Once the reform takes effect, businesses will no longer be able to add a separate surcharge when customers pay using cards.
Instead, payment processing costs will need to be included within the overall price of goods or services.
For small businesses this means:
- Card payment costs become part of operating expenses
- Product pricing may need to be adjusted
- Payment cost visibility becomes more important
- Businesses may review their mix of payment options
Understanding the true cost of accepting payments will become increasingly important.
How Payment Costs May Change
Even though surcharges are being removed, the Reserve Bank review also includes measures aimed at reducing payment costs.
These include:
- Lower Lower caps on interchange fees charged by card networks
- Increased transparency for merchant service fees
- Greater competition between payment providers
For many businesses, this means payment providers will need to provide clearer breakdowns of payment processing costs.
Businesses should ensure they understand:
- their average cost per payment
- the settlement timing of different payment types
- how easily payments can be reconciled
Questions Small Businesses Should Ask Now
With the October 2026 timeline approaching, businesses should begin reviewing how payments work within their operations.
Important questions include:
- How much of our revenue currently comes through card payments?
- What is our average payment processing cost across all payment types?
- How quickly do different payment types settle into our account?
- How much money sits in transit each day before settlement?
- How easy is it to reconcile incoming payments against invoices?
Answering these questions helps businesses understand their payment mix and operational impact.
Preparing Your Business Before October 2026
Preparing Your Business Before October 2026
Small businesses do not need to make immediate changes today, but it is useful to start preparing.
Practical steps include:
- Review your payment provider agreements
- Understand your average payment cost per transaction
- Evaluate how payment settlement timing affects your cash flow
- Consider payment options that provide faster settlement and simpler reconciliation
These steps help ensure businesses are ready for the upcoming regulatory changes.
Payments Key Takeaway
The removal of card surcharges represents one of the most significant changes to Australian payment pricing in recent years.
For small businesses, the focus will shift from passing payment costs to customers toward understanding and managing payment costs more effectively.
Businesses that review their payment setup early will be better prepared when the changes take effect in October 2026.
Key Payment Terms Explained
Card surcharge
A card surcharge is an additional fee charged by a business when a customer pays using a credit or debit card. It is usually intended to recover payment processing costs.
Merchant service fee
A merchant service fee is the fee charged by a payment provider to process a card transaction. This fee typically includes interchange fees, network fees and payment provider fees.
Interchange fee
Interchange fees are fees paid between payment providers when a card transaction is processed.
Settlement
Settlement refers to the time taken for payment funds to reach the business bank account after a transaction is completed.
Important Facts About Australia's Payment Regulation Changes
- The Reserve Bank of Australia completed its review of retail payments regulation in 2026.
- The review concluded that card surcharges should be removed from the payments system.
- Implementation of the reforms is expected from October 2026.
- The reforms also introduce changes to interchange fee caps and fee transparency.
- The goal of the reform is to simplify payment pricing for consumers and improve competition in the payments system.
Sources
Reserve Bank of Australia
Review of Retail Payments Regulation Conclusions Paper
March 2026
https://www.rba.gov.au/payments-and-infrastructure/review-of-retail-payments-regulation/
Related Payment Guides
Real time payments explained for Australian small businesses
How payment settlement timing affects business cash flow
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