Card Surcharges Are Ending in Australia from 1 October 2026
Card surcharges ending in Australia from 1 October 2026 will change how businesses manage card payment fees. If your business adds a fee when a customer pays by card, you will need to review that practice before 1 October 2026. From that date, eftpos, Visa, Mastercard and American Express are introducing rules that prevent businesses from adding a surcharge for paying with their cards. The change covers relevant debit, credit and prepaid cards. It does not mean that accepting cards becomes free: your payment provider can still charge your business a processing fee. [1, 2]
Here is what the change means for your pricing, invoices and cash flow.
Who pays the card processing fee?
The payment provider charges the business for processing a card transaction. Until 30 September 2026, a business may generally recover eligible costs through a card surcharge, provided it complies with the current rules, including the limit based on its cost of accepting that payment type. From 1 October, the affected card networks' rules will prevent a separate card surcharge. The business then decides how to manage the processing cost through its overall pricing and payment arrangements. [1, 2]
Example: Your business issues a $330 invoice and the customer pays by card. If your provider charges $6.08 to process that payment, the customer pays $330, your provider charges your business $6.08, and your business retains $323.92 before any other costs. The figures illustrate who pays; the actual fee depends on your provider and payment arrangement.
The business can choose to absorb that cost or take expected payment costs into account when setting its general prices. A customer who pays by bank transfer may therefore pay the same advertised price even though that payment costs the business less to receive. [1, 2]
Can you increase prices or offer a cash discount?
Yes, businesses can incorporate payment costs into their overall prices. Advertised prices and explanations for any increase must remain accurate. You cannot avoid the new rules simply by renaming a card surcharge a “handling fee” when it applies because the customer uses a card. [2]
A genuine discount for a different payment method can still be offered. The ACCC says businesses may offer a discount for paying by cash or PayID, provided the full price is displayed and the discount is clearly disclosed before the customer chooses how to pay. Do not advertise only the discounted price or make it more prominent than the full price. Check the presentation of any proposed discount carefully so it is a genuine discount rather than a disguised card surcharge. [2]
The change concerns card payment surcharges. It does not itself remove unrelated weekend, public holiday, booking or service fees. Other consumer pricing rules still apply to those charges. [1, 2]
What happens if you use Xero invoices and Stripe?
Xero says it will automatically stop adding a card surcharge to its invoices from 1 October 2026. For an invoice sent earlier but paid by card on or after that date, the customer will pay the invoice amount without the added processing fee. Xero also says the option to pass on processing fees will disappear from its Online payments settings. [3]
For Australian Stripe accounts with pricing and fees managed by Xero, Xero says its domestic card processing fee will change from 1.8% + 30 cents to 1.75% + 30 cents per transaction from 1 October 2026; those quoted fees include GST. At that rate, processing a $330 domestic card payment would cost about $6.08. This is a Xero specific example, not a universal rate. Check the fees and terms for your own payment setup, including whether your Stripe pricing is managed by Xero. [3]
What should your business do now?
Check your payment costs. Review provider statements and estimate how much you spend on card payments each month. Compare providers and available payment methods where appropriate.Review your pricing. Decide whether to absorb the cost, adjust your general prices, or use a combination. Consider your margins, customer expectations and the value of faster payment.
Check every payment channel. Review card terminals, online checkout, Xero invoices, payment links and any other system that currently adds a card fee. Ask each provider how its changes will work.Update customer information.
Remove outdated card surcharge notices from quotes, menus, websites, price lists and payment instructions. Ensure displayed prices are clear.Review invoices and reconciliation. When a customer pays an invoice in full, record any fee charged by the provider as a payment processing expense and reconcile the net bank deposit against the gross customer payment. Check how your software handles this automatically before posting manual entries.The new network rules start on 1 October 2026. Until 30 September 2026, businesses that surcharge must continue to comply with the existing rules. Check your own merchant agreement and payment provider's instructions, as the network rules and any exceptions are administered through those arrangements. [1, 2]
Need help assessing the impact?
At Tradewise Solutions, we can help you review payment fees, assess the effect on margins and update your pricing and bookkeeping approach before the change takes effect. Contact Tradewise Solutions to discuss your business.
Disclaimer: This article provides general information only and is current as at the date of publication. It does not take into account your business’s circumstances and should not be relied on as legal, tax or financial advice. Payment provider fees, card network rules and their application may vary. Check your merchant agreement and seek professional advice before making changes to your pricing or payment arrangements.
Sources and further reading:
1. Reserve Bank of Australia: Removal of Card Payment Surcharges: FAQs.
2. Australian Competition and Consumer Commission: Card surcharges and guidance on the October 2026 changes.
3. Xero: Card surcharging is going: what small businesses using Xero need to know.
