From 1 October 2026 you can no longer pass card fees on to customers. Here's why it matters and how to protect your margin.
From October 1, 2026, businesses in Australia can no longer add a surcharge when customers pay by card.
For many, that familiar 1-2% card surcharge at the checkout is gone. But the merchant fees haven't disappeared. Your bank or payment provider will still charge you to process card transactions. The difference is that you can no longer pass that cost on to the customer as a separate surcharge. As the RBA puts it, those costs can be reflected in your overall pricing instead.
This isn't just a payment system change; it's a direct hit to your profitability if not managed proactively.
Merchant fees might seem small per transaction, but over a year they add up to a substantial cost, directly hitting your bottom line. Let's say your business processes $1 million a year in card payments and your average merchant fee is 1.5%. That's $15,000 a year.
If your business operates on a 10% net profit margin, that $1 million of revenue generates approximately $100,000 of profit before absorbing those card fees. A $15,000 cost represents 15% of that $100,000 profit. That's why simply absorbing this isn't an option without first looking at your numbers. Small percentages can have a surprisingly large impact on profit.
The key is to understand your numbers now, so you can make informed decisions about your pricing strategy. What will you do to protect your margin?
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Please also note that many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances. Should you have any further questions, please get in touch with us for assistance with your SMSF, business, bookkeeping and tax requirements. All rights reserved. Brought to you by RGA Business and Tax Accountants. Liability Limited by a scheme approved under Professional Standards Legislation.
