Summary
- From 1 October 2026, Visa, Mastercard and eftpos can ban businesses from adding surcharges to card transactions, enforced through merchant agreements.
- Renaming a surcharge as an “admin fee” or “service fee” does not avoid the ban and may constitute misleading conduct under Australian consumer law.
- American Express and PayPal surcharges are unaffected, provided they do not exceed actual processing costs.
- This article is a plain-English guide for Australian businesses on the 2026 card surcharge ban, prepared by LegalVision, a commercial law firm.
- LegalVision specialises in advising clients on payment regulation and Australian consumer law compliance.
Tips for Businesses
Review your merchant agreement now to understand your current surcharge arrangements. Update your pricing strategy before October 2026 by absorbing costs, adjusting base prices, or setting minimum transaction values. Do not rename surcharges to avoid the ban – the Australian Competition and Consumer Commission (ACCC) treats this as misleading conduct carrying serious financial penalties.
Your business can currently add a surcharge to card transactions to cover the card processing fee. From 1 October 2026, card networks can ban your business from applying these surcharges. The card networks will enforce the ban contractually through your merchant agreement with your bank or payment processor. This article explains the card surcharge ban, who enforces it, and what it means for your business.
How Does the Ban Work?
The Reserve Bank of Australia (RBA) is changing the rules that affect how you charge customers for card payments. Currently, the RBA prevents card networks from banning surcharges, meaning you are free to add them.
They will enforce this through your merchant agreement with your bank or payment processor. If you breach the rules, they can instruct your payment provider to terminate your contract. For example, if your online retail store currently adds a 1.5% surcharge when a customer pays for a $200 purchase with a credit card, you will no longer be able to charge that extra $3 to cover your card processing fees.
Why Is the RBA Making This Change?
The RBA has decided to lower interchange fees to make up for the income you currently earn through surcharges, so that absorbing card processing costs into your prices remains affordable. Interchange fees are what your bank pays to the customer’s bank when processing a card transaction. The card networks set these fees, and your bank passes the costs on to you as part of your merchant service fee. By banning surcharges and lowering interchange fees instead, the RBA aims to make pricing more transparent.
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Which Payment Types Are Affected?
Visa, Mastercard and eftpos will all be able to prohibit surcharges on debit, credit and prepaid cards from 1 October 2026. These networks are regulated by the RBA because they dominate the Australian payments market and are essential for most businesses to operate. However, you can still have a surcharge for American Express or PayPal if your costs justify it. For example, if your business currently adds a 2% surcharge to Amex payments, you can continue this practice after October 2026, as long as the surcharge does not exceed your actual cost of accepting that payment method.
Can You Rename a Surcharge to Avoid the Ban?
No, you cannot rename a card surcharge to avoid these rules. The ACCC warns that calling a surcharge an “admin fee”, “service fee”, or “handling fee” does not change its legal classification. If the fee only applies to card payments, it is still a card surcharge regardless of what you call it. The ACCC treats this practice as “drip pricing”, which is a form of misleading conduct under Australian consumer law. Businesses that breach these rules can face serious fines, making creative renaming a costly mistake for your business.
For example, a concert ticket seller cannot add a $5 “booking fee” at checkout that only applies when customers pay by card. This is a card surcharge by another name and will be banned from 1 October 2026. However, if a booking fee applies to all payment methods equally, it is a genuine booking fee and not a card surcharge. Even genuine booking fees must be included in the upfront advertised price. This applies regardless of whether your business operates online or in person, as the same pricing rules apply to both. A ticket advertised at $100 with a mandatory $5 booking fee added at checkout is misleading. The advertised price should be $105.
What Are Your Options After the Ban?
If you cannot surcharge card payments, you need alternative ways to manage these costs. For example, you can:
- absorb the costs as a business expense, similar to rent or utilities. The RBA reduction in interchange fees from 1 October 2026 is designed to make this more affordable;
- increase your baseline prices across all products or services to account for the absorbed processing costs; or
- set a minimum transaction value for card payments to avoid disproportionate fees on small purchases.
Each option affects your business differently. Absorbing costs reduces your profit margins, unless the lower card processing fees make up for the lost surcharge revenue. Raising prices means all customers pay more, even those not paying by card. Setting minimum transaction values could frustrate customers making small purchases, but it protects you from losing money on low-value card transactions.
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Key Takeaways
From 1 October 2026, Visa, Mastercard and eftpos can ban you from adding surcharges to card transactions. The card networks will enforce the ban contractually through your merchant agreement with your bank or payment processor. You cannot avoid the ban by renaming a surcharge to an “admin fee” or “service fee”, as the ACCC treats this as misleading conduct with serious penalties. You should review your pricing strategy and consider your options for managing card processing costs after the ban takes effect.
LegalVision provides ongoing legal support for businesses through our fixed-fee legal membership. Our experienced commercial contract lawyers help businesses understand and manage their legal obligations, policies, contracts, employment law, disputes, intellectual property and more, with unlimited access to specialist lawyers for a fixed monthly fee. To learn more about LegalVision’s legal membership, call 1300 544 755 or visit our membership page.
Frequently Asked Questions
The ban begins on 1 October 2026. From this date, Visa, Mastercard and eftpos can prohibit you from adding surcharges to debit, credit and prepaid card payments.
Yes, the ban only applies to Visa, Mastercard and eftpos. You can continue to surcharge American Express and PayPal transactions if your processing costs justify it.
The RBA’s lower card processing fees are designed to make up for the surcharge revenue you will lose, but the actual impact depends on your current processing costs and what you charge in surcharges.
Yes, the same rules apply whether you operate online or in person.
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