Australia's Credit Card Surcharge Ban Set to Squeeze Small Businesses

Ross Surace's Lennox Street Deli in Melbourne is preparing to raise prices due to an upcoming credit card surcharge ban. The ban, set to take effect on October 1st, will prohibit businesses from imposing surcharges on payments made with Visa, Mastercard, eftpos debit and credit cards. American Express and China's UnionPay are also removing surcharges, while PayPal follows on October 5th.

The Reserve Bank of Australia estimates that about 16% of Australian businesses apply surcharges, resulting in consumers paying around A$1.6 billion annually in fees. However, the ban does not stop banks, card networks or payment providers from charging businesses to process transactions.

Australia's new policy brings it in line with Britain and the European Economic Area (EEA), where surcharges on most consumer debit and credit cards are banned. The central bank says the change will deliver greater transparency for consumers, as the price they see when shopping will be the price they pay when tapping their card.

Small businesses, like Surace's cafe, are particularly affected by the ban, with thin margins making it difficult to absorb the costs of processing transactions. The average restaurant made a net profit of just 2.6% in 2025, according to John Hart, national president of Restaurant & Catering Australia.