Summary
A credit card surcharge is an extra fee that Australian businesses add to the price of a purchase when you pay by card — typically 0.5% to 2% of the transaction amount; it exists because businesses pay a fee (called a merchant service fee) to banks and payment providers each time a card transaction is processed, and surcharging has allowed them to pass that cost directly to the customer who chose to pay by card. This practice, known as credit card surcharge Australia, has been a topic of debate for many years.
From 1 October 2026, surcharges on Visa, Mastercard and eftpos payments are banned across Australia — confirmed by the Reserve Bank of Australia (RBA) as the most significant reform to Australia’s payments system in more than 20 years; the change applies to credit, debit and prepaid cards on these three networks; the price you see is the price you pay, regardless of how you pay
American Express, BNPL services (Afterpay, Zip) and Diners Club are not covered by the ban — businesses can still surcharge these payment methods after 1 October 2026; in practice, most everyday card payments in Australia use eftpos, Visa or Mastercard and will be surcharge-free
If you have ever sat at a restaurant terminal and watched a 1.5% surcharge appear after tapping your card — or paid a 1.9% fee booking an airline ticket online — that experience is about to end for most Australians.
From 1 October 2026, the Reserve Bank of Australia is banning card surcharges on the payment networks that cover the vast majority of everyday transactions. Here is what it means, why it is happening and what to watch out for.
What is a credit card surcharge?
A credit card surcharge is an additional fee added to the price of a purchase when a customer pays by card. It is separate from the advertised price and appears as a line item on the receipt or payment terminal screen.
Example: A café charges $6.50 for a flat white. You tap your debit card. The terminal adds a 1.5% surcharge — $0.10 — making the total $6.60. The café keeps the $6.50; the $0.10 goes toward covering the merchant service fee the café pays to its bank for processing the card transaction.
Why surcharges exist: Every time a card transaction is processed, the merchant’s bank charges a merchant service fee — typically 0.3-2% of the transaction, depending on the card type, bank and contract. Surcharging was legalised in Australia in 2003 to allow businesses to pass this cost to the customer choosing the payment method, rather than building it into prices for all customers.
The problem: Surcharging became inconsistent, confusing and excessive. Businesses were charging different amounts for different cards; some charged more than their actual cost; customers had no way to know what they would be charged until they reached the terminal. The RBA concluded that the system was no longer working as intended.
What is being banned from 1 October 2026?
From 1 October 2026, businesses cannot add a surcharge to payments made by:
- Visa (credit, debit and prepaid cards)
- Mastercard (credit, debit and prepaid cards)
- eftpos (debit cards)
This covers the overwhelming majority of everyday card payments in Australia — supermarkets, cafés, restaurants, petrol stations, online shopping, airline bookings and everything in between.
Who confirmed this? The Reserve Bank of Australia (RBA) — through its Review of Merchant Card Payment Costs and Surcharging, published 31 March 2026. The RBA has directed acquirers (the companies that provide payment terminals to businesses) to remove surcharging functionality from their systems by 1 October 2026.
Who enforces it? The card networks (Visa, Mastercard, eftpos) will enforce the ban through their merchant agreements — not the ACCC. A business that continues to surcharge after 1 October 2026 will be in breach of its payment provider agreement and may lose the ability to accept card payments.
What is NOT covered by the ban?
American Express: AmEx is not a “designated network” under the RBA’s framework — the ban does not apply. Businesses can still add a surcharge for AmEx payments after 1 October 2026. (In practice, AmEx has indicated it supports the reform and is working to remove surcharging from the same date, but it is not legally required to do so.)
Buy Now Pay Later (BNPL): Afterpay, Zip, Klarna, humm and similar BNPL services are not covered by the ban. Businesses that accept BNPL can still pass on the BNPL provider’s fees (which are typically 3-6% of the transaction) through surcharging.
Diners Club: Not a designated network — surcharges can continue.
Cash handling fees: A business that charges extra for cash handling is not subject to this ban — it relates to card surcharges specifically.
Discounts for cash or alternative payment: Businesses can still offer a discount for paying by cash or bank transfer — the ban covers surcharges (adding to the price), not discounts (reducing the price).
The numbers behind the reform
Australians currently pay approximately $1.6 billion in card surcharges every year. The RBA estimates its combined reforms will:
- Save consumers and businesses up to $1.8 billion per year
- Reduce total merchant payment costs by approximately $910 million per year (through lower interchange fee caps introduced alongside the surcharge ban)
The reform is partly funded by a reduction in interchange fee caps — the fees banks charge merchants for card transactions. The credit card interchange cap will fall to 0.3%, significantly reducing the underlying cost that businesses use to justify surcharging.
What changes for businesses?
Businesses that currently surcharge for Visa, Mastercard and eftpos must stop by 1 October 2026. They have two options for handling their payment processing costs:
Option 1 — Absorb the cost: Treat merchant service fees as a cost of doing business, like rent or electricity. Many large businesses already do this.
Option 2 — Build it into prices: Increase base prices to reflect the cost of accepting cards. This means all customers — whether paying by card or cash — share the cost.
What this means for prices: Some businesses — particularly small cafés, restaurants and retailers with thin margins — may raise prices slightly to cover the cost of accepting cards. The RBA is aware of this outcome and considers it preferable to the current inconsistent surcharging system.
What changes for credit card rewards?
The interchange fee cap reduction will reduce the revenue banks earn from credit card transactions. Australian banks have publicly indicated they will respond by reducing rewards points-earning rates, increasing annual card fees, or both.
Historical precedent: When interchange fee caps were last reduced on 1 July 2017, most Australian banks immediately cut points-earning rates on their credit cards.
If you use a rewards credit card for everyday spending to accumulate points — check your card’s current terms and watch for bank communications from October 2026 onward. Your earning rate may change.
Second tranche — April 2027
The surcharge ban is the first of two tranches of reform. From 1 April 2027, additional caps on foreign-issued card fees (the fees charged when a tourist or overseas visitor pays with their home country card) will also come into effect.
FAQs (frequently asked questions)
When is the credit card surcharge ban in Australia?
From 1 October 2026. Businesses will no longer be allowed to add a surcharge to payments made by Visa, Mastercard or eftpos from this date.
Does the ban cover debit cards?
Yes — the ban covers credit, debit and prepaid cards on the Visa, Mastercard and eftpos networks. It is not limited to credit cards.
Can businesses still surcharge American Express?
Yes — American Express is not covered by the RBA’s ban. Surcharges on AmEx can continue. Afterpay, Zip, Klarna and other BNPL services are also not covered.
Will prices go up because businesses can no longer surcharge?
Some may. Businesses that currently recover payment costs through surcharging will need to absorb them or build them into base prices. The RBA considers this an acceptable trade-off for a simpler, more transparent system.
Will credit card rewards change?
Possibly. Lower interchange fee caps will reduce bank revenue from credit card transactions. Most major banks have indicated they may reduce rewards rates, increase annual fees or both. Watch for communications from your bank.
Who enforces the surcharge ban?
The card networks (Visa, Mastercard, eftpos) enforce the ban through merchant agreements. Businesses in breach may lose the ability to accept card payments through that network.
Related guides
- What is EFTPOS? Australia’s payment system explained →
- What is PayID? How to send money in Australia →
- What is BPAY? How to pay bills in Australia →
What it means for your transfers
The surcharge ban applies to card payments within Australia — it does not affect international money transfers, which are processed through separate systems. To send money home to India, the Philippines, Nepal or anywhere in OrbitRemit’s network, use OrbitRemit directly from your Australian bank account via PayID or bank transfer.
This guide is for general information only. Verify current RBA surcharging rules at rba.gov.au. Last updated September 2026.
Sources: RBA — Frequently Asked Questions: Removal of payment surcharges from 1 October 2026 (rba.gov.au official) | ANZ — Australia Card Surcharge Ban 2026 (anz.com.au, May 8, 2026) | CommBank — RBA card surcharge impact on small businesses (commbank.com.au, July 10, 2026) | mst.com.au — RBA Card Surcharge Ban Australia: What Businesses Must Know (July 7, 2026) | forsyths.com.au — Ending card surcharges: What you need to know before 1 October 2026 | cosca.com.au — The RBA is banning card surcharges from October 2026 (April 1, 2026)
