When cards cost more: the surcharge rules change on 1 October 2026

If you charge a card surcharge, the ground is about to shift. From 1 October 2026 the major card networks move to "no surcharge" rules for the most common card types, and the fee you currently pass on to customers stops being something you are allowed to pass on. Now is the time to get in front of it, not late September.

What's changing

Right now a business can charge a card surcharge as long as it does not exceed what it actually costs that business to process the payment. That is the "cost of acceptance" rule, enforced for several years, and it stays in place until 30 September 2026.

From 1 October 2026 the major card networks introduce "no surcharge" rules for payments made with prepaid, debit and credit cards on their networks. In practice, a business will no longer be able to add a surcharge to a transaction on those card types.

Visa, Mastercard and eftpos are making the change as part of a broader Reserve Bank of Australia reform. American Express is not bound by that reform in the same way, but it has separately decided to remove surcharging from the same date. So in practice the change lands across all four networks at once.

Other fees are not affected. A hospitality weekend or public holiday surcharge, or a standalone booking or service fee, is a different thing and is untouched. This change is specifically about surcharges added because the customer paid by card.

Relabelling a surcharge will not get you around it. A "cash discount" or a "handling fee" that lands in the same place as the old surcharge is likely to be treated the same way. If that is on the table for your business, have the conversation before you act on it, not after.

Why this matters for your business

If your invoicing currently leans on a card surcharge to offset processing costs, that recovery is closing. Depending on your card volume, that means absorbing the cost, adjusting your prices, or steering customers toward another payment method.

The businesses that plan for this now, rather than in the last week of September, will make the calmer decision.

A quick example

Say a service business processes $50,000 a month in card payments and recovers a 1.5% surcharge to cover processing. That is around $750 a month, or $9,000 a year, currently paid by customers rather than by the business. Once the surcharge option disappears, the business either absorbs that $9,000 or reflects it in its pricing. Those are the only two options, and one of them is a decision you would rather make deliberately.

If you invoice through Xero

If your invoices carry a surcharge through Xero's online payments, the change applies automatically. There is nothing you need to do on 1 October itself:

• Surcharges stop automatically from 1 October. Card payments keep working; the processing fee simply disappears from the invoice.
• Unpaid invoices already sent with a surcharge are updated too. If a customer pays on or after 1 October, they pay the invoice amount only.
• The option to pass on processing fees disappears from your Online payments settings entirely.
• You can switch it off earlier if you would rather. Nothing stops you doing that yourself at any point before the deadline.

If you take card payments through a terminal or a provider outside Xero, check with that provider directly. The change is not automatic everywhere.

What you should consider doing

Review whether you still offer card payment

If you do not want to absorb the processing cost, it is worth asking whether offering card payment still makes sense for your business at all. Direct debit or bank transfer may become the more practical default.

Update your invoice templates

Any invoice branding theme or template wording that references a card surcharge needs reviewing and updating before the new rules apply. An invoice that still promises a surcharge it can no longer charge is a conversation with a customer you do not need to have.

Update your pricing, if it needs it

Where processing costs have been recovered through a surcharge, that cost may need to be built into your standard pricing instead. This is worth modelling now rather than reacting to in October.

Common questions

Does this affect all card types?

It applies to prepaid, debit and credit card payments on the major networks. Other payment methods, and non-card surcharges such as hospitality weekend fees, are not affected.

Do I need to do anything before October?

The current surcharge rules still apply until 30 September 2026, so no immediate change is required. The value in acting now is in reviewing your pricing and invoicing while there is time, so you are not scrambling when the new rules start.

Will this change what I pay for card processing?

No. The change affects whether you can pass processing costs on as a surcharge, not what your payment provider charges you. Speak to your provider about how it affects your account specifically.

How is GST treated on a card surcharge?

A card surcharge is not a separate bank fee for GST purposes. It takes the same GST treatment as the underlying sale: if the sale is taxable, so is the surcharge portion; if the sale is GST-free, so is the surcharge. That has not changed, but it is worth confirming your bookkeeping treats it that way now, ahead of any pricing changes.

Talk it through before October

The LINK Advisors and LINK Books teams can help you review your pricing and invoicing ahead of these changes, so your cash flow is not caught off guard. If your file is in Xero, we can look at your online payment settings and invoice templates with you - see our Xero advisors in Brisbane.

Get in touch and we will work out what it means for your numbers.