ShaBaas Pay outlines five actions for Australian small businesses ahead of the 1 October card surcharge changes
Australian businesses that currently recover card-processing costs through surcharges should review pricing, provider costs and payment mix before the October transition.
15 August 2026 — Key points:
Card-network no-surcharge rules take effect from 1 October 2026 across eftpos, Mastercard and Visa; American Express has also said it will implement the change from the same date.
Businesses that currently recover card costs through surcharges need to decide whether to absorb the cost, reprice, renegotiate provider terms or change their payment mix.
Lower interchange caps do not automatically equal the final merchant service fee; businesses should assess their own merchant statements and provider pricing.
ShaBaas Pay recommends reviewing payment cost, settlement, reconciliation and customer preference together rather than selecting a payment method on transaction price alone.
Australian businesses have less than two months to prepare for one of the most visible changes to card payments in years. From 1 October 2026, eftpos, Mastercard and Visa have announced no-surcharge rules for card payments. American Express has also announced that it will implement its surcharge changes from the same date.
The change follows the Reserve Bank of Australia's Review of Merchant Card Payment Costs and Surcharging. The RBA concluded that card surcharging is no longer achieving its intended purpose and amended its standards so the designated card networks can impose no-surcharge rules from 1 October 2026. The RBA says businesses and consumers find current surcharging arrangements complex, while card payment costs remain too high, particularly for smaller merchants.
For small businesses, the practical issue is not simply whether a surcharge button disappears from a terminal or checkout page. The more important question is what happens to the underlying cost of accepting the payment once it can no longer be passed on as a separate card surcharge.
ShaBaas Pay's view is that the October change should be treated as a payment-cost review, not simply a surcharge-compliance exercise.
"The surcharge change should trigger a broader payment review, not just a pricing change. Small businesses need to understand what each payment method actually costs, how quickly it settles, how easy it is to reconcile and whether it suits the customer journey. The objective is not to replace cards everywhere. It is to make the payment mix more deliberate."
- Varinthorn (Jo) Kalra, COO, ShaBaas Pay
The cost does not disappear when the surcharge does
Businesses will still incur costs when they accept card payments after 1 October. For merchants that already absorb those costs, the operational impact may be limited. But for businesses that currently recover some or all of their card fees through a surcharge, the change creates a direct pricing and margin decision.
The RBA has paired the surcharge change with lower domestic interchange caps that take effect on 1 October 2026:
Consumer credit: domestic-issued consumer credit card interchange will be capped at 0.30% of transaction value for transactions acquired in Australia.
Debit and prepaid: the domestic-issued cap will reduce to 8 cents per transaction, or 0.16% where the fee is calculated on an ad-valorem basis; the weighted-average benchmark remains 8 cents.
Those are wholesale interchange settings, not the final merchant service fee a business pays. A merchant's total card-acceptance cost can also include scheme fees, acquiring margin, gateway charges, terminal costs and other provider fees. The key action for a business is therefore to look at its own merchant statements rather than rely on a headline market rate.
A simple way to model the margin impact
Consider a business processing $50,000 a month in card sales at an illustrative all-in acceptance cost of 1.5%. That represents approximately $750 a month in card costs. If the business currently recovers that full amount through a card surcharge, it needs to decide how the $750 will be handled once that surcharge is no longer available.
Illustrative merchant impact
Merchants have several practical options to consider:
Absorb the cost: incorporate card acceptance costs within existing margins.
Adjust advertised prices: review headline prices where current card surcharges recover a material share of payment costs.
Negotiate provider terms: use merchant statements to compare acquiring arrangements and ask how interchange reductions will be passed through.
Encourage preferred payment methods: where appropriate, offer compliant discounts for lower-cost methods rather than relying on card surcharges.
The right response will vary by transaction value, customer profile, payment channel and provider contract.
Payment choice becomes a commercial decision
Cards remain important for Australian businesses. They are familiar to customers, widely accepted and embedded in ecommerce and digital-wallet experiences. The surcharge changes do not make cards obsolete. They do, however, make it more important to understand whether every transaction needs to travel over the same payment rail.
Account-to-account options such as PayTo can form part of that assessment. Australian Payments Plus describes PayTo as supporting one-off, ad hoc and regular payments directly from a customer's bank account, with customer authorisation through online banking, real-time notifications and information that can support matching and reconciliation.
For a business, that may be useful for invoices, repeat collections, payment links, hosted checkout or software-integrated payment workflows. But PayTo is not a universal substitute for cards. Customer preference, participating-bank support, agreement settings, transaction limits and provider capabilities all matter. A mixed payment strategy will often be more practical than a single-rail approach.
Five actions small businesses can take before 1 October
Measure the current payment mix. Identify how much revenue is collected by debit card, credit card, PayTo, PayID, direct debit, bank transfer and other methods.
Calculate the actual all-in cost of card acceptance. Use recent merchant statements and include transaction fees, percentage fees, gateway charges, terminal costs and other relevant charges.
Ask the provider what changes on 1 October. Confirm when surcharge functionality will be disabled, whether merchant pricing will change and how the new interchange settings will flow through.
Review advertised pricing and invoices. Businesses that currently recover card costs through a surcharge should decide whether customer-facing prices, invoices, payment pages or terms need updating.
Test alternative payment journeys. Where appropriate, compare bank-payment options against cards using customer completion, payment certainty, settlement, reconciliation and total cost - not transaction price alone.
There is also a transition issue for invoices
The RBA's FAQ highlights an important timing point for businesses that issue invoices. If an invoice is sent before 1 October 2026 but the customer makes the card payment on or after that date, card surcharging may no longer be available. Businesses should check with their payment service provider and update invoice wording, online payment pages and accounting templates before the changeover.
The bigger opportunity is better payment visibility
For many small businesses, payments have historically been treated as a checkout cost rather than an operating system. The surcharge changes create an opportunity to look at payments more holistically: which method customers prefer, what each method costs, when funds become available, how failed payments are handled and how easily transactions can be matched back to invoices or orders.
That matters because the most expensive payment method is not always the one with the highest visible transaction fee. Administration, failed payments, delayed settlement and manual reconciliation also consume time and margin.
ShaBaas Pay has published a detailed practical guide to the RBA card surcharge changes for Australian small businesses, including a readiness checklist, provider questions and payment-mix considerations.
Transparency reforms continue into 2027
The surcharge change is only one part of the RBA's reform package. Large acquirers will begin publishing quarterly merchant service fee data, with the first publication due by 30 October 2026 for the quarter ending 30 September 2026. This should give businesses a clearer benchmark when comparing providers.
The RBA is also requiring large acquirers to publish a measure of interchange pass-through, with the first publication due by 30 January 2027. Additional information on merchant statements becomes mandatory for full statement periods commencing on or after 1 April 2027, helping businesses compare domestic and foreign card costs and in-store versus online acceptance costs.
The immediate deadline is 1 October 2026. The broader shift is toward a payment environment where small businesses need to be more deliberate about cost, customer choice and operational efficiency. Businesses that understand their payment economics before the surcharge changes take effect will be better placed to make that transition without simply accepting a margin hit.
About ShaBaas Pay
ShaBaas Pay is an Australian payments fintech helping businesses accept real-time account-to-account payments using PayTo and PayID. Its payment infrastructure supports hosted checkout, payment links, invoice and QR payment journeys, and API integrations for Australian businesses and software platforms. ShaBaas Pay is a FinTech Australia member and operates in Australia's real-time payments ecosystem. Learn more at shabaas.com.
Sources
• Reserve Bank of Australia - Impact and Implementation
• Reserve Bank of Australia - Interchange Fees
• Reserve Bank of Australia - Competition in Card Acquiring Services
• Australian Payments Plus - PayTo for businesses
Note: This article provides general information only and is not legal, tax, accounting or financial advice. Businesses should confirm implementation details with their payment service provider and obtain professional advice where appropriate.
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