Card payment sucharges banned in Australia from 2026

[SeaWolf]

companies where card payments always were an integral part of the business model (chain hotels and rental car companies as prime examples). Card surcharges are just drip pricing. These industries have always preferred the drip pricing approach.

The one that has really irritated me is Rex. Their surcharge free payment option is to go to the airport check in counters and do the booking in person with cash. All online payment methods have a surcharge and there's a 1% "handling fee" on top of that for using the website to make the booking (rather than the airport counter).

Fees and surcharges

It's obvious that no one is going to drive to airport with a wad of cash just to make the booking (it'd cost you more in parking than the surcharge) and I reckon even if you did the airport check in counters would probably have no idea how to handle a cash booking or have change on hand. It's pure drip pricing.
These sort of shenanigans is probably a key reason why about 60% of poll respondents on here are glad to see the back of the surcharges, even if it does mean the credit card points game will not be as lucrative in future.

 

[Viridis]

It's obvious that no one is going to drive to airport with a wad of cash just to make the booking (it'd cost you more in parking than the surcharge) and I reckon even if you did the airport check in counters would probably have no idea how to handle a cash booking or have change on hand. It's pure drip pricing.

That’s actually just the sort of thing I would do just to …. you know ….. make a point

Always frustrated by Qantas’ fees on credit cards even when it was a Qantas branded card. Infuriating. Always thought we should all turn up at the airport with a suitcase full of cash for the airfare and teach them the cost of handling cash !!

 

[Mr_Orange]

why would I do that when it makes me worse off vs paying by card?

WTF? After 1st October, whether you pay with cash or by card, it will cost the exact same amount!

 

[kookaburra75]

Once again, many folks seem to be missing the point. Businesses, when they write their business model, need to account for all of their costs and build those, along with profit, into their pricing. Unsurprisingly, there is a cost associated with accepting payment, whether that is cash, cheque (listed for completeness only and not current relevance) or card (debit/credit/EFTPOS). Not baking this into the business model is a failure to write a competent business model. There should never have been a need to surcharge.

The same thing applies to penalty rates, where they apply. I will not use businesses that have weekend or public holiday surcharges. They just aren't necessary. The number of weekends and public holidays are known in advance and therefore so are the additional staffing costs. Build them into the business model and keep prices consistent. If you can't compete, don't open on weekends or public holidays.

I agree - except for the penalty rates bit. Back a few years ago now (1990-2000s) when I was managing not-for-profit organisations, most members would pay by cheque, and then those pesky credit cards starting creeping in. Receiving, handling and banking cheques cost a lot of time i.e. money, and of course the merchant fees on credit cards. I built that into my budgets as that was a real cost and of course I didn't have the option of charging members different levels of fees.

This is the classic cost-of-convenience model. How much is your time worth?

 

[Be.au]

For very small businesses or others that choose to outsource their card payments to a third-party platform (like all the hobbyists and market stall holders et al who use Stripe/PayPal/etc), the costs are not decreasing because those platforms (as intermediaries) are choosing not to lower their fees. Someone told me yesterday that Stripe has in fact increased its fees slightly (I haven't checked the truth of that).

Stripe are lowering their fees..... just.

Australia Drops Interchange by 0.5% - Stripe Drops it by 0.05% -

https://www.reddit.com/r/stripe/comments/1vagiu9/australia_drops_interchange_by_05_stripe_drops_it

Stripe responded;

The RBA’s new interchange framework is nuanced and doesn't apply a uniform reduction across every card type. The reduction in interchange varies - ranging from 0 bps (e.g. commercial credit cards and American Express, which are not covered by the mandate) up to 50 bps for consumer credit cards. Stripe is passing through all of the savings we're receiving based on our actual mix of card types processed, rounded to the nearest 0.05%.

 

[HMcM]

The ban is not being done at the legal level at all.

Frequently Asked Questions – Removal of payment surcharges from 1 October 2026

Frequently asked questions about Card Payments Regulation

www.rba.gov.au

Interesting, good to know. But they are still price fixing which is the bigger issue.

Because the merchant interchange fees that banks can charge are also being capped (this is what's impacting the credit card reward programs, not the surcharge ban itself). The RBA is doing 2 things at once and many people are incorrectly conflating them.

They're being conflated because they are one action. I would have no issue with reverting to the pre-2003 model, but the government is picking winners and losers by telling private companies how much they can charge for a service. That is what is absolutely gutting the credit card market.

From October, the cost for a business to process card payments will be less than what it costs them today. So none should need to increase their prices by as much as they are surcharging today.

They may not raise it the full amount (may, as has been stated by others indirect interchange fees are not dropping by much) but they will certainly raise it higher than the current base price.

Additionally the cost will be spread amongst all customers and not just card customers, so the cost per customer will be less.

AKA you're robbing from Peter to pay Paul, picking winners and losers.

WTF? After 1st October, whether you pay with cash or by card, it will cost the exact same amount!

Which makes you worse off if you pay by cash (no points etc). Which is probably a background reasoning as to why the government is pushing this change because they are quite open about wanting to eliminate cash payments as much as they can.

 

[lovestotravel]

Which makes you worse off if you pay by cash (no points etc). Which is probably a background reasoning as to why the government is pushing this change because they are quite open about wanting to eliminate cash payments as much as they can.

Yep

 

[Tea-Aholic]

Can anyone explain what happens if I use an overseas (non-Australian) issued credit card?

From what I understand currently, surcharges are not differentiated for foreign cards at POS except for some online sites like the ATO.

Can I get around the reduction of rewards this way? And also interest to know when using a foreign card, who pays the interchange fee and how is it shared with the foreign bank?

 

[levelnine]

Can anyone explain what happens if I use an overseas (non-Australian) issued credit card?

From what I understand currently, surcharges are not differentiated for foreign cards at POS except for some online sites like the ATO.

Can I get around the reduction of rewards this way? And also interest to know when using a foreign card, who pays the interchange fee and how is it shared with the foreign bank?

No one can predict with certainty.

Some payees may ban foreign cards. I wouldn't be surprised if that's what government institutions (eg ATO) do & some retailers that work almost exclusively with domestic customers.

Others may accept them. I wouldn't be surprised if that's what most physical retailers do because they don't want to risk a lost sale from a foreign customer.

It will cost more to accept foreign cards than domestic cards, but many retailers may not notice if they pay a single blended rate for card acceptance.

 

[SeaWolf]

I've already encountered one business that had a domestic cards and a foreign cards surcharge sign. I forget exactly what the numbers were, but it was like 1%-ish for domestic and 3%-ish for foreign cards. I'm semi-regular there and it only popped up about a month ago, before that it was just a flat rate for all cards. Obviously after October 1st the domestic one will disappear, but my understanding is that they can continue to surcharge for foreign cards.

 

[Tiki]

Can anyone explain what happens if I use an overseas (non-Australian) issued credit card?

From what I understand currently, surcharges are not differentiated for foreign cards at POS except for some online sites like the ATO.

Can I get around the reduction of rewards this way? And also interest to know when using a foreign card, who pays the interchange fee and how is it shared with the foreign bank?

I use my USA cards all the time, no problems with any Aussie merchant so far.

 

[kpc]

Waiting to see if the ATO drops credit card fees as they should do

 

[Mr_Orange]

Waiting to see if the ATO drops credit card fees as they should do

You can add a whole host of other government departments to that list.

 

[Mr_Orange]

Which makes you worse off if you pay by cash (no points etc).

You still are not worse off. The amount of money that you have paid is identical. You don't get points for paying by cash now and you won't after 1st October either.

 

[transpactraveller]

Some payees may ban foreign cards.

Visa and Mastercard will have to update their worldwide advertising to put an exception for Australia.