Are Card Surcharges Being Banned in Australia?
Are Card Surcharges Being Banned in Australia? What Retailers Need to Know
By now, most Australians are familiar with the small surcharge that often appears when paying by card, a fee many businesses charge to help cover payment processing costs.
It is a common practice across retail, hospitality, e-commerce and other businesses with frequent low value transactions, including cafes, convenience stores, online retailers and vending machines.
But proposed changes from the Reserve Bank of Australia (RBA) could change how businesses recover these costs in the future.
Are Card Surcharges Currently Legal in Australia?
Yes, for now, card surcharges are generally legal in Australia.
However, businesses cannot charge whatever amount they like. Any surcharge must reflect the actual cost of accepting that payment method and cannot exceed it.
In practice, this means if a business charges a card fee, it should be able to justify that amount based on its payment processing costs.
What Changes Has the RBA Announced to Australia’s Card Surcharge Rules?
The RBA has announced reforms that would allow major card schemes to introduce “no-surcharge” rules.
From 1 October 2026, schemes such as Visa, Mastercard and eftpos may be able to prevent merchants from charging separate fees on debit, prepaid and credit card payments.
If implemented, retailers may no longer be able to add a separate “card surcharge”, “credit card fee” or “debit card fee” at checkout for those payment methods.
What Is a Card Scheme?
A card scheme is the network that sits behind card payments and sets the rules for how those payments work.
The main examples are:
- Visa
- Mastercard
- eftpos
These schemes set rules that apply across banks, payment providers and merchants.
Does This Mean Businesses Won’t Pay Card Fees Anymore?
No, and this is an important distinction.
Even if retailers can no longer charge customers a separate surcharge, businesses may still have to absorb the cost of accepting card payments.
These costs can include:
- merchant service fees;
- interchange-related costs;
- scheme fees;
- terminal or payment gateway costs; and
- payment processor fees.
The real question is not whether these costs disappear. It’s whether businesses can continue passing them on to customers as a separate charge.
Can Businesses Just Rename the Fee?
Probably not. Simply changing the label of the fee is unlikely to get around the rules.
If a customer only pays the fee because they used a card, it may still be treated as a card surcharge, even if it’s described as a transaction fee, service fee, admin fee, handling fee or processing fee.
For example, if a vending machine sells a product for $3.00 but adds a $0.10 “transaction fee” only for card payments, that fee may still be considered a card surcharge.
If separate surcharges are prohibited, businesses may need to rethink their broader pricing model instead.
Which Retailers Could Be Most Affected?
The changes are likely to matter most for businesses operating on tight margins or handling a large number of small transactions.
This may include, vending machine operators, cafes and takeaway businesses, supermarkets and grocers, online retailers, hospitality venues and other high-volume, low-margin businesses.
For these retailers, even small processing costs can add up significantly over time.
If separate surcharges are no longer allowed, many businesses may need to factor those costs into their pricing instead.
What Should Retailers Do Before 1 October 2026?
Businesses that currently charge card surcharges should start preparing early.
Some practical steps may include:
- checking whether existing surcharges accurately reflect actual card acceptance costs;
- reviewing merchant and payment processor agreements;
- considering whether card costs should be built into pricing;
- reviewing website, POS and vending machine disclosures;
- assessing alternative payment options; and
- getting legal advice before changing pricing structures.
The Key Takeaway on Australia’s Proposed Card Surcharge Reforms
Card processing costs are not going to disappear.
What may change is whether businesses can continue charging customers a separate fee to recover them.
With the changes expected to take effect from 1 October 2026, now is a good time for retailers to review their payment arrangements, pricing approach and customer-facing disclosures.
Need Advice About Card Surcharges?
Gladwin Legal helps Australian retailers understand their legal obligations and implement practical, commercially sensible solutions.
If your business currently charges card surcharges, or you are unsure how the upcoming changes could affect your pricing model, get in touch with the team for advice.