Australian retailers are scrambling to overhaul payment systems, pricing and customer communications as nationwide changes to card payment surcharges takes effect today, with businesses warning the change could ultimately push some prices higher.

From October 1, businesses can no longer add a separate surcharge when customers pay by eftpos, Visa or Mastercard. American Express, UnionPay and PayPal have also moved to remove surcharging under their respective rules.

The Reserve Bank of Australia has estimated the reforms could save businesses around $910 million a year through lower interchange fees, while consumers have previously paid about $1.6 billion annually in card surcharges.

However, retailers now face the challenge of absorbing payment costs that were previously passed directly to customers at the checkout.

The Australian Small Business and Family Enterprise Ombudsman has advised businesses to check EFTPOS terminals, point-of-sale systems, invoicing software, websites and online payment platforms, while removing outdated surcharge references from menus, signage, booking systems and other customer-facing material.

Businesses have also been urged to test their systems and prepare staff to explain the change. 

The NSW Small Business Commissioner has also urged businesses to test their payment systems and make sure staff are prepared to explain the changes to customers.

The pricing implications could be more significant. For retailers that previously added a card surcharge, one option is to build some or all of those costs into their standard prices. That would mean customers pay the same advertised price regardless of whether they use cash or a card.

The Australian Competition and Consumer Commission has confirmed that businesses will no longer be able to impose card payment surcharges under the new card-network rules. It also notes that the changes do not prohibit other charges, including legitimate weekend, public-holiday or booking fees.

The reform is already prompting some businesses to reconsider their payment strategies. 

Reports ahead of the deadline indicated some retailers were encouraging customers to use cash, while others were preparing to increase base prices to compensate for payment-processing costs.

For consumers, the immediate change should be straightforward: a displayed price should no longer increase simply because a customer chooses to pay by card.

The RBA says the removal of surcharging is intended to make card payments simpler and more transparent, while lower interchange-fee caps are designed to reduce merchant costs and particularly benefit smaller businesses. The reforms also aim to increase transparency around fees charged throughout the card-payment system.

Importantly, businesses are not prohibited from offering discounts for preferred payment methods, with merchants able to continue to incentivise customers to use cash or PayID, for example, subject to applicable pricing rules.

The change represents a major shift after more than two decades of Australia’s card-surcharge regime. 

The change does not technically amount to the Reserve Bank of Australia directly banning retailers from surcharging. Instead, the RBA has removed its prohibition on card networks imposing “no-surcharge” rules, allowing the networks to introduce rules preventing merchants from adding card payment surcharges. The card networks and payment service providers are responsible for enforcing those rules, rather than the RBA. 

Further changes are coming. From October 30, designated card networks and large acquirers must begin publishing specified card-payment fee information, while more detailed merchant statements are due from April 1, 2027. Foreign-issued card interchange caps will also take effect in April. 

For retailers, the immediate priority is compliance: disabling card surcharges, checking payment terminals and online systems, updating displayed prices and ensuring staff understand the new rules.