From 1 October 2026, Australian businesses can no longer add a surcharge to payments on designated eftpos, Mastercard and Visa cards. The Reserve Bank cut interchange fees at the same time, so most merchants pay less per transaction than before. But the fee has not gone. It now comes out of your margin unless it is built into your price. For a business that used to pass the whole fee on, the surcharge ban is a small, permanent price cut you did not choose. The fix is a deliberate price review, not a quiet hope that nobody notices.
The plain version: work out what the card fee costs you as a share of revenue, decide which customers and products can carry it, and change the price list once, properly.
What changed
The card surcharge ban in Australia, briefly
The ban applies to designated debit, credit and prepaid cards on the eftpos, Mastercard and Visa networks, and came from the Reserve Bank's review of retail payments. Domestic interchange caps were lowered from the same date. Other payment types and networks sit outside the ban, so check with your bank or payment provider which of your transactions are covered. The RBA's announcement and your provider's merchant notice are the sources to rely on.
The margin hit
How much the surcharge ban costs your profit margin
Do this calculation before you change anything. It takes an hour with last quarter's data.
Find your effective card rate. Take total merchant fees for the last three months and divide by the card revenue they relate to. Your provider's monthly statement has both. This is your real rate, after the interchange cut, not the headline rate in the contract.
Find your card share. What percentage of revenue arrives by card? A café may be above 90 per cent. A trade business that invoices by bank transfer may be under 10 per cent, in which case the ban barely touches you and the effort is better spent elsewhere.
Multiply, then compare to net margin. Card share times effective rate gives the fee as a share of total revenue. Set that against your net margin. A fee of 1 per cent of revenue sounds small. Against a 6 per cent net margin it is a sixth of your profit.
| Step | Where to find it | Example |
|---|---|---|
| 1. Effective card rate | Merchant fees for the quarter divided by card revenue | 1.1% |
| 2. Card share of revenue | Card takings divided by total revenue | 90% |
| 3. Fee as share of revenue | Step 1 multiplied by step 2 | About 1.0% |
| 4. Share of net profit lost | Step 3 divided by net margin (here 6%) | About one sixth |
Illustrative figures. Your provider's monthly merchant statement has the inputs for steps 1 and 2.
The response
How to put your prices up to cover the card fee
Most owner-led businesses respond in one of three ways, and the first is the most common and the most expensive.
Absorb it and say nothing. This is a decision to accept a lower margin. It is sometimes right, for example when a competitor has already cut prices, but it should be made on purpose, with the number known.
Round the price up across the board. Simple and usually fine for low-ticket retail and hospitality, where customers see the price once. The risk is that it lands hardest on the products that already carry the least margin.
Reprice by product and customer. This is the better answer for most businesses between $3M and $30M. Look at margin by product or service line and by customer group, then move price where the margin is thinnest and the customer is least price sensitive. It is also the moment to fix the older pricing problems that sit underneath: discounts given years ago and never removed, quotes built on last year's costs, and jobs priced below a sensible floor. Those usually cost far more than the card fee. We set out where they hide in revenue leakage.
Whichever you choose, do not relabel the fee. A line that reads like a surcharge under another name invites complaints and regulator attention. Put the cost into the price, show the price clearly, and if you write to business customers about a price change, explain it in terms of costs and service, not the ban.
| Response | When it fits | Risk |
|---|---|---|
| Absorb the fee | A competitor has already cut prices, or card share is small | A permanent margin cut nobody decided on |
| Round prices up across the board | Low-ticket retail and hospitality | Lands hardest on lines that already carry the least margin |
| Reprice by product and customer | Most businesses between $3M and $30M | Takes a few weeks of data work, done once |
Who should own it
Pricing governance: make one person responsible for the price list
The surcharge ban exposes a common gap. In many small businesses nobody owns the price list. Prices are set when a product launches, adjusted when a supplier puts costs up, and discounted by whoever is talking to the customer. A once-a-year pricing review with a named owner, a margin floor for quotes and an approval step for discounts would have made the ban a ten-minute adjustment. Without them, it is a new leak.
How Ajility does it
A pricing and margin review, then a rule that holds
Ajility's Pricing and Margin Review takes your actual sales and cost data, shows margin by product, service and customer, finds where price and discounting are leaking profit, and hands back a revised price list, a quote floor and a short pricing policy with a named owner. It runs over three to six weeks, depending on size and data. Prices are published on the packages page.
If you are not sure whether pricing is your biggest gap, the free Operating Scan takes about six minutes and will show where to look first.
Questions founders ask
Common questions
When did the card surcharge ban start in Australia?
- The ban on surcharging designated eftpos, Mastercard and Visa debit, credit and prepaid cards took effect on 1 October 2026, following the Reserve Bank's review of retail payments. Domestic interchange caps were lowered from the same date.
Can I still charge a card fee under a different name?
- A charge that works like a surcharge under another label is likely to draw complaints and regulator attention. The safer course is to include the cost in the price you display. If you are unsure about a specific practice, ask your payment provider or a lawyer.
How do I work out what the surcharge ban costs my business?
- Divide last quarter's merchant fees by the card revenue they relate to, to get your effective rate. Multiply that by the share of revenue paid by card. Compare the result to your net margin to see how much of your profit the fee now takes.
Should a small business raise prices after the surcharge ban?
- Usually, yes, but selectively. Repricing by product and customer protects the lines with thin margins without pushing price-sensitive customers away. It is also a good time to remove old discounts and set a minimum margin for quotes.