ATO to End Credit Card Payments Starting December 2026

The Australian Taxation Office (ATO) has announced it will stop accepting credit card payments from December 2026, following a national ban on payment card surcharges. Commissioner of Taxation Rob Heferen explained in an internal memo that the decision was not made lightly but was necessary due to the high merchant fees involved. Heferen stated that the ATO can no longer absorb these costs, which are ultimately borne by taxpayers.

The transition period until November 30, 2026, is intended to give taxpayers time to switch to alternative payment methods. Heferen emphasized that the ATO believes it is unfair for the broader community to bear the cost of credit card payments made by individuals. As a government agency, the ATO aims to ensure transparency and fairness in its operations.

The decision has faced criticism from independent Member for Wentworth Allegra Spender and One Nation leader Pauline Hanson. Both argued that the ban removes a crucial cash-flow option for small businesses, especially as the government simultaneously demands they absorb card surcharges. The Australian Banking Association countered that businesses are free to decline credit card payments and often opt for lower-cost debit alternatives.

Heferen defended the move by highlighting the value of transparency in pricing. Starting October 1, Australians will have a clearer view of payment costs following the government’s support for the Reserve Bank of Australia’s review of merchant card payment costs and surcharging. The ATO has already implemented changes to cease credit card payment surcharges.