Card surcharging is ending

What small businesses need to know

From 1 October 2026, Australian businesses will no longer be able to add a surcharge to eftpos, Visa, American Express or Mastercard payments.

For businesses that currently pass some or all of their card processing fees on to customers, this means each card transaction will become a direct business cost. Depending on the business, the change could affect margins, pricing and cash flow.

What should businesses consider?

There is no single approach that will suit every business. The right response will depend on your margins, customers, pricing and the payment methods you offer.

Build card processing costs into your pricing

One option is to factor card processing costs into your overall prices or hourly rates rather than adding a separate fee at checkout.

Businesses should consider the effect of any price changes on customers and competitiveness. The changes also cannot be avoided simply by renaming the surcharge as a “card handling fee” or offering a “cash discount”.

Consider the broader cost of getting paid

Card processing fees are only one part of the cost of getting paid.

Different payment methods can also affect how quickly customers pay, cash flow, administration, reconciliation and the time spent following up outstanding invoices.

A payment method that costs slightly more but results in faster payment may still make commercial sense when those wider benefits are taken into account.

Review the payment methods you offer

Businesses may also want to review the range of payment methods available to customers.

Direct debit and PayTo, for example, can have lower processing costs than card payments while still offering relatively fast settlement.

What if you use Xero?

Businesses using Xero to send invoices with a card surcharge applied should be aware that the surcharge will stop automatically from 1 October.

Card payments will continue as normal, but customers will no longer be charged the processing fee on top of the invoice. Unpaid invoices already issued with a surcharge will also be updated so customers paying on or after 1 October pay the invoice amount without the additional fee.

The change presents the opportunity to review your payment arrangements, pricing and the effect processing costs may have on margins and cash flow.

Flor-Hanly is a Xero Certified Advisor. Contact our team if you would like help reviewing your Xero payment settings, pricing or cash flow and preparing your business for the card surcharge changes.

• Read more: RBA surcharge ban: What it could mean for your business and how Xero is helping »