Should You Raise Prices When Surcharges Disappear? A Merchant's Guide

From October 2026, adding a surcharge for card payments becomes illegal in Australia. For a lot of small businesses, that surcharge wasn't just a fee passed along - it was covering a real cost. So the honest question isn't "should we surcharge" anymore. It's: where does that cost go instead?

There's no single right answer here, but there is a wrong way to approach it - waiting until the ban lands and reacting under pressure. Here's how to think it through properly.

 

Option one: build it into your prices

The most straightforward option is folding your average card acceptance cost into your listed prices. Customers already expect the sticker price to be the price, so a modest, well-communicated adjustment tends to land better than a surprise fee ever did. The risk is doing it clumsily - a flat across-the-board increase can feel like a price hike disconnected from the ban, especially if a competitor times theirs differently.

 

Option two: absorb it and protect your margin elsewhere

Some businesses, particularly those with tighter competition or price-sensitive customers, will choose to absorb the cost rather than touch prices at all. This only works if you're also looking at the other side of the ledger - whether that's negotiating supplier costs, tightening rostering, or reducing the fee itself rather than just eating it.

 

Option three: reduce the underlying cost instead of passing it on

This is the option most businesses skip past, but it's often the most durable: changing how you accept payments so there's less fee to absorb or pass on in the first place. Card fees exist because every transaction routes through a card network that takes a cut. Payments that move directly bank-to-bank - using Australia's NPP rather than Visa, Mastercard, or eftpos avoid that network fee altogether. It's the difference between finding a new place to put a cost and not generating the cost in the first place.

 

A blended approach is usually the realistic answer

In practice, most businesses won't pick just one lever. A sensible combination looks like: adopt a lower-cost way to accept payments where you can, make a small, clearly-explained pricing adjustment to cover what's left, and hold off on anything dramatic until you've seen a full quarter of real numbers post-ban.

 

What not to do

Don't wait until the ban is in effect to decide. Don't make the change silently, customers notice unexplained price movements far more than explained ones. And don't assume the RBA's reduction in interchange fees means the cost has gone to zero for you - it's been reduced, not eliminated, for most acceptance methods.

 

The bottom line

The surcharge ban removes a line item from the receipt, not the underlying cost of accepting a card. The businesses who come out ahead will be the ones who used the lead-up to actually reduce that cost, not just relabel it.

Curious how much you could save by changing how you accept payments, rather than just where the cost sits? Apply for Pyng — zero transaction fees, always, because we want to change how Australians pay.