Surcharges Are Becoming Illegal — And Now Is the Time to Act

If you run a small business in Australia, here`s something worth paying attention to. From October 2026, charging customers a surcharge when they pay by card will be banned. Illegal.
Done.

But here`s the thing — this isn`t just a rule change you need to comply with. It`s actually an opportunity. Because alongside the surcharge ban, the Reserve Bank of Australia has announced the biggest cut to card payment fees in over 20 years. And small businesses stand to benefit the most.

The question is: will you actually see those savings? That depends entirely on who you bank your payments with — and whether you act now.

What`s Actually Changing

There are two big changes coming, and they work together.

First, surcharging is being banned. From October 2026, you can no longer add a surcharge when customers pay by Visa, Mastercard or eftpos. No exceptions. The ACCC will enforce it.

Second, the fees behind the scenes are being cut significantly:

• Credit card fees capped at 0.3% per transaction, down from up to 0.8%
• Debit card fees capped at 8 cents per transaction, down from 10 cents
• International card fees capped at 1.0% for the first time — currently these can cost merchants up to 2.75% per transaction

The RBA estimates these cuts will save Australian merchants around $910 million a year. Small businesses — who currently pay the highest rates and have the least bargaining power — are expected to benefit the most.

The logic is simple: lower fees mean you no longer need to surcharge. Merchants can build modest card costs into their pricing and come out ahead. But only if your payment provider actually passes on the savings.

The Catch: Most Providers Won`t Pass It On Unless You Push

This is the part that doesn`t make the headlines — but it should.

When similar fee cuts happened in the UK and Europe, merchants didn`t automatically see the benefit. Payment providers quietly absorbed the savings instead. In the European Union, merchants only received around 45 cents in the dollar of the intended savings. The rest went to acquirers and card networks.

The RBA knows this. That`s why new rules will require payment providers to publicly report exactly how much of the savings they`re passing on. The RBA will publish that data — effectively naming those who aren`t playing fair.

But public reporting only helps if you`re paying attention. And the hard truth is that businesses on flat-rate or blended pricing plans — which is most small businesses — won`t automatically receive any benefit at all. The savings flow through automatically only to merchants on unblended, itemised plans.

So if you`re sitting on a standard plan with one of the big payment providers, the October 2026 changes may come and go without a cent of savings reaching you.

Why Now Is the Time to Act

Don`t wait for October 2026 to think about this. The businesses that will benefit most are the ones making smart moves now — before the changes hit and before everyone else starts shopping around.

Here`s what to do:

1. Find out what you`re actually paying Do you know your effective rate — the total fees you pay as a percentage of your card revenue? Many small business owners don`t. Call your provider and ask for a full breakdown: interchange fees, scheme fees, and their margin. If they can`t give you a straight answer, that tells you everything.
2. Consider going to zero — right now Why wait to pay less when you could pay nothing at all? Pyng is a zero-cost payment solution built specifically for Australian small businesses. No monthly fees. No percentage clipped from every sale. No hidden charges. While other providers will be negotiating over how much of the RBA`s cuts to pass on, Pyng users are already paying nothing.
   The surcharge ban is coming regardless. The difference is whether you spend the next 12 months continuing to pay fees — or whether you make the switch now and stop paying altogether.
3. Review your pricing before October 2026 With surcharging banned, you`ll need to absorb card costs into your advertised prices. The lower fees make this manageable for most businesses. And if you`re on Pyng, there`s nothing to absorb.
4. Watch the pass-through data when it`s published From early 2027, the RBA will publish data on how much each major acquirer has passed on from the interchange cuts. Use that information. If your provider is at the bottom of the list, it`s time to vote with your feet.

Already on Pyng? You`re Already Ahead

If you`re already using Pyng, you don`t need to stress about surcharge compliance, fee negotiations or whether your provider is passing on savings. You`re paying zero — and that`s not changing.

As the new transparency rules expose just how much small businesses have been overpaying, we think the choice will become obvious. A fair payments system starts with a provider that isn`t taking a cut of every transaction you make.