Australian credit and debit card surcharges explained

Why do Australian businesses have payment surcharges?

When you buy something from a business via a credit or debit card, there's a small processing cost for the business.

This is true whether you tap and pay with a Visa or Mastercard credit card or insert and use EFTPOS.

Businesses can pass this cost onto customers via a surcharge. However, since October 1, they are no longer allowed to add a surcharge to debit, prepaid or credit card payments made on the eftpos, Mastercard and Visa networks. Amex has also volunteered to participate, so these surcharges won't be charged on American Express transcations.

The only networks not impacted are Discovery/Diners Club and UnionPay.

How much is a credit card surcharge?

Businesses could previously set their own surcharge amount as long as it was based on the actual cost of accepting a particular type of payment. Excessive surcharges are banned in 2016.

American Express credit cards were exempt from both the ban on excessive surcharges in 2016, and the newer ban on any surcharges in 2026. This was due to how its business model and regulatory status interacted with the Reserve Bank of Australia (RBA).

However, Amex announced they would voluntarily participate in the surcharge ban. This means Amex is changing its merchant rules so businesses can no longer surcharge Amex cards from 1 October 2026.

The 1 October 2026 surcharge ban

Since 1 October 2026, businesses can no longer add a surcharge to debit, prepaid or credit card payments made on the eftpos, Mastercard and Visa networks, under rules set by the Reserve Bank of Australia.

The ban only covers the eftpos, Mastercard and Visa networks, so American Express, Diners Club, UnionPay and BPAY payments aren't included. Amex is voluntarily participating in the ban, but you might find some businesses still charge surcharges when paying by Diners Club, UnionPay, BPAY and PayPal.

The RBA has also lowered the caps on interchange fees paid by Australian businesses for domestic card transactions, and a cap on foreign card transactions starts on 1 April 2027.

What were the rules for credit card surcharges?

Previous to October 1, the RBA set out the surcharge rules that merchants have to follow and the ACCC was in charge of enforcing these rules, which were:

1. Merchants are allowed to charge a fee to recover the cost of processing/accepting card payments.
2. This surcharge can't exceed the cost of processing the card payment.
3. Payment providers must give merchants and businesses an annual statement that sets out their average card payment costs by type.
4. Merchants can also pass on other payment costs, such as payment terminal fees.

How businesses can calculate surcharges

The cost of accepting a Visa debit card payment from one customer will be different to the cost of accepting a Mastercard credit card payment from another customer.

By law, merchants can't just charge the higher fee to all transactions. They have to either charge the lowest surcharge to all payments, or a separate surcharge for each payment type.

• Lowest surcharge. If debit card transactions cost a business 0.50% per transaction and credit card transactions cost 1.0%, a merchant can charge 0.50% for all transactions. It can't charge 1.0% on all transactions as this would be excessive.
• Surcharge by payment type. The same business could charge 0.50% for debit card transactions and 1.0% for credit card transactions.
• Flat fee. A business could charge a flat fee to cover all these costs. But that flat fee can't exceed their costs for each transaction type.

What about other fees?

You may have noticed some sneaky fees showing up on your receipt when you dine at a cafe or restaurant, especially when using QR code ordering platforms. These platforms often charge a fee of 1.5% to 1.7% for the "convenience" of purchasing through the app. The business can choose whether to absorb this cost or pass it on to the customer.

The fees that businesses can still legally charge could be named things like:

• Platform fee
• Booking fee
• Service fee
• Handling fee
• Admin fee

The distinction between these fees and credit card surcharges is that these fees are charged on all transactions, no matter how you pay.

Whether it's cash, card, BPAY or paypal, the fee is added on top of your purchase price.

If this isn't the case, and the fee only applies to credit card payments, it's not a legal fee and they business could be reported.

Frequently asked questions

• Are credit card surcharges ever illegal?

  A surcharge is typically legal in Australia, as long as the merchant can prove that it covers the reasonable cost of acceptance and has clear notices about the surcharge before you pay.

• What protection is there against high surcharges?

  In 2026, the Australian government introduced a ban on credit card surcharges.

  Ten years earlier in 2016, they had introduced an excessive surcharge ban to make sure customers weren't paying more than what it cost to process the payment: the Competition and Consumer Amendment (Payment Surcharges) Act 2016.

  This ban applied to payments made by EFTPOS, Visa, Mastercard and American Express "companion cards" (Amex cards that used to be issued by some banks).

• If I use my credit card via PayPal, would I still need to pay a surcharge?

  Businesses in Australia cannot charge customers an extra fee or surcharge for using PayPal starting 5 October 2026. This includes credit card payments and bank transfers.

• Why were credit card surcharges banned?

  Credit card and debit card surcharges were banned in Australia to improve price transparency at the checkout, and prevent 'price shock' when a customer expects to pay one price but actually pays a higher price, including fees.