Card surcharges are banned from October 1. What’s changing at the checkout?
Australians use debit and credit cards to pay for almost three out of four payments. Here’s what will soon change for shoppers and businesses.
Beginning October 1, Australian businesses will no longer be able to add a surcharge when customers pay with debit, credit, EFTPOS or prepaid cards. This significant change in how payments are processed is the result of a Reserve Bank of Australia review and decision to eliminate card surcharging from all designated card networks, including EFTPOS, Mastercard, Visa, and American Express.
The Australian Restaurant and Cafe Association believes this will be one of the largest changes in payment methods Australia has ever seen, and many small businesses are reportedly unprepared for the new regulations.
Historically, cash accounted for 69% of payments in 2007, with debit and credit cards used for only one in four payments. However, over the years, card usage has surged, now representing almost three out of four payments. Debit cards remain the most popular payment method, accounting for 49% of all transactions in 2025, while credit cards follow closely at 23%.
Card surcharging costs businesses money, with the current cost ranging from 0.43% for EFTPOS debit cards to up to 1.36% for American Express credit cards. With the ban on card surcharges, businesses have two options: absorb the remaining cost themselves or incorporate those costs into slightly higher prices, passing the expense on to all customers regardless of their preferred payment method.
Shoppers who pay by cash can anticipate the most noticeable difference, as they can currently avoid card surcharges. Cash transactions made up around 15% of consumer payments in 2025, but they account for almost one in four purchases under $10. Large retailers such as Woolworths, Coles, and JB Hi-Fi are expected to maintain their current pricing structure on October 1.
The impact on prices and inflation may be minimal, with the Reserve Bank estimating that if businesses were to absorb all card surcharge costs, it could add about 0.1% to measured inflation as a one-time effect.
Businesses will still incur costs when accepting cards after October 1, and these costs may be reflected in overall pricing. The Reserve Bank has acknowledged that businesses will need to find ways to cover these costs. In response to the ban, businesses may either absorb the costs or pass them on to customers through slightly higher prices. The change aims to provide consumers with a more transparent payment experience and eliminate surprises at checkout.
Written by urgent.news from The Conversation AU's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
