From October 1st 2026, Australian businesses will no longer be allowed to add a surcharge when you pay by card on major networks. That means no extra percentage at the terminal for Visa, Mastercard or EFTPOS. American Express and UnionPay drop surcharges on the same date, with PayPal to follow later on the 5th of October. The Reserve Bank of Australia expects consumers to save about $1.6 billion a year in surcharge fees, and businesses about $200 million. At the same time, the cap on interchange fees (the cut banks take from merchants for processing cards) falls from 0.8% to 0.3% on domestic consumer credit transactions. That is expected to cut what businesses pay banks by around $910 million a year.
So will your grocery bill, coffee or school fees actually get cheaper?
Not automatically.
Interchange is a big slice of bank card revenue. With that income shrinking, the major banks have already started resetting products. Some cards now carry higher annual fees. Rewards are weaker. Travel insurance is thinner. Points and airline transfers are harder to use.
Commonwealth Bank is a clear example. It is closing its old Awards program and shifting customers onto CommBank Yello, its in-house points system. Qantas Frequent Flyer links are being narrowed, and some long-term customers say they no longer qualify for the perks they once got. Other banks are making similar cuts. That is the part many cardholders will feel first. The surcharge disappears at the till, but flights, insurance, and bonus points get harder to earn, as about one in six Australian businesses used to surcharge. From Thursday, they cannot (at least not as a separate line on a Visa, Mastercard, or EFTPOS sale).
Those card costs do not vanish. They have to be absorbed or built into the sticker price.
Australia’s #1 finance podcast ‘She’s on the money’ said:
“I don’t know why an 11 cent surcharge has the ability to annoy me quite as much as it does 😂
From 1 October, card surcharges are changing in Australia. Will everything suddenly become cheaper? Probably not. But the price you see should actually be the price you pay, and I personally won’t miss watching the total mysteriously increase when I tap my card.
A small win, but I’ll take it.”
Some operators say they will lift prices across the board, push customers toward bank transfer or cash, or stop accepting certain card types. A swim school owner has put the gap at roughly $1 extra per lesson if families cannot switch off cards. Hospitality groups say many venues are looking at menu increases, dropping some cards, or going cash-only. Councils and other bodies with regulated fees have even less room to move. Raising charges can take months of public consultation. One large NSW council has estimated a hit in the hundreds of thousands of dollars, money that would otherwise go to roads, paths or community events. The RBA’s view is that shoppers were already paying these costs, either as a surcharge or baked into prices. Officials do not expect an ongoing inflation effect, though there may be a one-off adjustment as businesses reset menus.
Small-business groups argue the timing is tight. The surcharge ban and the new interchange cap land on the same day, just as traders head into the Christmas peak. They wanted a transition period to see whether merchant fees actually fall before they lock in new prices.
If you pay by card, the extra percentage at the terminal should disappear on covered networks. The total on the receipt should match the advertised price more often.
If you collect points, check your card terms now. Rewards programs, airline transfers and complimentary insurance are being trimmed industry-wide. A card that looked worthwhile because of points may no longer stack up once fees rise and earn rates fall.
If you run a business, you cannot add a card surcharge on designated networks from 1 October. You can still offer a discount for cash or account-to-account payments. You can also shop around for a cheaper merchant facility. The RBA is forcing more fee disclosure from late October.
Account-to-account payments send money straight from one bank account to another and skip the card networks. They are still a small slice of Australian retail, only a few per cent of in-store and online sales, but they become more attractive once surcharging is banned. You will save if you regularly pay surcharges and your shop, cafe, or council doesn’t simply raise the base price by a similar amount. You may not save if the businesses you use lift prices to cover residual card fees, your credit card annual fee goes up, your rewards or insurance are cut, or you still carry a balance and the interest rate on that card rises. The RBA designed the package to lower card costs and clarify prices. Banks and merchants are already deciding who wears the gap.
So, starting from October 1st, look at the cards in your wallet, the fees you pay, and how the places you shop take money. The surcharge line is going. The rest of the bill is being rewritten around it.
For more information about this change, it’s recommended to contact your Bank’s Support.
