Are you seeing new ‘service fees’ since the card surcharge ban? Here are the rules
Businesses can’t just give the card surcharges a different name. Some are putting up their prices instead.
Since the card surcharge ban came into effect in Australia on October 1, many businesses have started charging new "service fees" or "daily surcharges" on customers' bills. Some consumers have expressed concern over these fees, wondering if they are legal. However, according to the Reserve Bank of Australia and the Australian Competition and Consumer Commission (ACCC), businesses cannot simply rename a card surcharge to make it permissible. The substance of the charge remains the same.
The ACCC clarifies that businesses can still charge genuine service, booking, or other fees unrelated to the payment method. However, businesses are warned against describing a card payment surcharge under a different name, as it may be considered misleading conduct. The key question is what triggers the charge. If a fee only appears because the customer paid by card, it cannot be considered a separate surcharge. Calling it a "service fee" does not change the fact that the charge still exists.
According to the Reserve Bank, around 16% of businesses had card surcharges before the ban, primarily cafes, restaurants, grocery stores, Aldi, and some online retailers. The ban aims to prevent businesses from profiting from card usage while consumers bear the cost. The Reserve Bank estimates that consumers paid about A$1.6 billion in card surcharges in 2024-25, with surcharges ranging from 0.5% to 1.5% per transaction.
Businesses still need to pay banks and payment providers for accepting cards. Removing the surcharge does not eliminate these costs, which can be absorbed by the businesses, found elsewhere, or built into the prices of goods and services. Some businesses may have raised their menu prices on October 1 to cover these costs, potentially passing the burden to cash-paying customers or those using cheaper payment methods, such as cash or PayID. However, such discounts must be clearly disclosed.
The reform introduces a trade-off in transparency. In the past, a separate surcharge allowed customers to see the additional cost of using a card. The new system folds this cost into the advertised price, making it clearer but less transparent about why the price has increased. While the reform improves overall transparency about what customers will pay, it reduces visibility regarding the reasons behind the price increase.
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.
