How to Recover Card Payment Costs Without Misleading Customers
The New Pricing Problem for Card Payments
From 1 October 2026, Australian businesses can no longer add a separate surcharge for payments made with Visa, Mastercard, American Express and eftpos cards. That does not mean card acceptance suddenly becomes free. It means the cost needs to be handled differently.
The safer approach is to build card payment costs into your normal prices, review your payment provider fees, and communicate price changes honestly. The risky approach is to rename a card surcharge as a “service fee”, “admin fee”, or “processing fee” when the fee is still triggered by paying by card.
This guide explains how to recover card payment costs without misleading customers, using practical pricing options, examples, and wording that is easier to defend.
The safe way to recover card payment costs
The safest starting point is simple: treat card acceptance as a normal business cost. Rent, wages, packaging, utilities, software, insurance, and payment fees all affect your prices. After the surcharge ban, card payment costs should generally sit inside your overall pricing rather than appear as a separate card fee at checkout.
That does not mean every item needs a dramatic price rise. In many cases, the adjustment may be small, especially if card fees are only one part of your cost base. The important part is that your displayed price and customer communications match what the customer will actually pay.
A practical rule is this: if a customer only sees the extra charge because they choose a card, it may create surcharge risk. If all customers see the same standard price before they order, book, or pay, the pricing is usually cleaner.
What changed for card surcharges in Australia
The Reserve Bank of Australia announced changes that allow card networks to introduce “no surcharge” rules from 1 October 2026. The ACCC guidance says businesses can no longer charge a surcharge for payments made with Visa, Mastercard, American Express or eftpos cards from that date.
The change applies to card payment surcharges. It does not automatically ban other types of fees, such as weekend or public holiday surcharges, where those fees are not based on the customer choosing to pay by card.
That distinction matters. A Sunday surcharge that applies to everyone who buys on Sunday is different from a fee that appears only when someone taps, inserts, or enters a card.
Pricing options after the surcharge ban
Option 1: Absorb the cost
This is the simplest customer experience. You leave prices unchanged and accept that card fees reduce your margin.
This can work if your margins are healthy, your average transaction value is high, or payment costs are already minor compared with your other expenses. The drawback is obvious: small costs add up across hundreds or thousands of transactions.
Option 2: Build the average cost into prices
This is often the most practical option. Estimate your average card payment cost, then adjust product or service prices enough to recover part or all of that cost.
Example: a service currently priced at A$80 has an average card acceptance cost of around 1%. Instead of adding an A$0.80 card surcharge, the business might review whether the standard price should become A$81, A$82, or stay at A$80 depending on other costs and market conditions.
The key is honesty. If the price rises from A$80 to A$90 because wages, rent, materials, software, and card costs all increased, do not tell customers the increase is only because card surcharges were banned.
Option 3: Review payment provider fees
Before raising prices, check whether your payment costs are higher than they need to be. The RBA has said new transparency measures are intended to make it easier for businesses to compare payment fees.
Ask your provider for a clear breakdown of:
- Merchant service fees
- Terminal rental or device costs
- Online payment fees
- International card costs
- Chargeback fees
- Monthly minimums
- Settlement timing
- Any gateway or platform fees
For many businesses, negotiating or switching providers may recover more margin than changing menu prices or service fees.
Option 4: Offer a clearly disclosed payment method discount
The ACCC guidance says businesses can offer discounts for a particular payment method, such as cash or PayID, if the discount is clearly disclosed before the customer chooses to book, order, or pay.
The safer display is to show the full price first, then show the discount as a genuine reduction.
Better:
- Haircut: A$65
- PayID discount: A$2 off
Riskier:
- Haircut: A$63
- Card price: A$65
The second version can confuse customers because the more prominent price may not be the full price many people will pay.
A simple cost recovery worksheet
Use this quick worksheet before changing prices.
| Step | Question | Example |
|---|---|---|
| 1 | What were your monthly card sales? | A$40,000 |
| 2 | What did card acceptance cost last month? | A$480 |
| 3 | What is the rough average cost rate? | 1.2% |
| 4 | What share of customers pay by card? | 85% |
| 5 | Can provider fees be reduced first? | Maybe, get two quotes |
| 6 | What price change would be proportionate? | Add A$0.50 to A$1 on selected items |
| 7 | How will the change be explained? | “Updated prices reflect increased operating and payment costs.” |
Do not use this worksheet as a legal test. Use it as a business planning tool so your price changes are based on real numbers, not panic.
Customer wording that reduces complaint risk
Customer wording should be clear, plain, and not overstate the role of the surcharge ban.
Safer wording
“Our prices have been updated to reflect changes in our operating costs, including payment processing costs. The displayed price is the price you pay unless another clearly stated non-card surcharge applies.”
This wording works because it does not blame the whole increase on card fees.
Riskier wording
“We have increased prices because the government banned card surcharges.”
This may be risky if the increase also reflects wages, rent, stock, utilities, platform fees, or other business costs.
Better checkout wording
“Card surcharges are not added. Displayed prices include normal business costs.”
This is cleaner than using vague wording like “processing fee applies”, especially if the fee is connected to card payment.
Mistakes that can look misleading
Mistake 1: Renaming the card surcharge
Calling a card surcharge a “service fee”, “technology fee”, or “admin fee” does not make it safer if the fee only appears because the customer pays by card.
Mistake 2: Displaying the discounted price as the main price
If most customers will pay the full card-inclusive price, the full price should not be hidden behind a smaller cash or PayID price.
Mistake 3: Blaming the whole increase on payment fees
If a product rises from A$30 to A$36, and card costs only explain A$0.30 to A$0.60 of that increase, do not imply the whole A$6 increase is due to card payment changes.
Mistake 4: Forgetting online checkout flows
Some businesses fix in-store signs but forget website carts, booking pages, invoice payment links, QR ordering systems, or delivery platform menus. Audit every place a customer sees a price.
Mistake 5: Leaving old surcharge signs up
Old signs such as “1.5% card surcharge applies” can create confusion even if staff no longer charge it. Remove or replace old signage before 1 October 2026.
Mini case example: cafe price update
A small cafe sells about A$55,000 per month and estimates that card acceptance costs average 1.1%. That is about A$605 per month.
Instead of adding a card fee, the owner reviews the menu and makes three changes:
- Coffee prices rise by A$0.20
- Selected breakfast items rise by A$0.50
- A clearly disclosed Sunday surcharge remains because it applies to Sunday trading, not card use
The cafe also removes “card surcharge applies” from the counter sign and updates the POS settings. A new sign says:
“Card surcharges are not added. Displayed prices are the prices you pay. Sunday surcharge applies on Sundays and is shown before payment.”
This is stronger than hiding the cost in a checkout surprise. Customers see the price before ordering, and the Sunday surcharge is separated from card payment choice.
Key takeaways
Card payment costs do not disappear after the surcharge ban. They need to be managed through better pricing, provider review, cleaner checkout settings, and honest customer communication.
The safest path is to build ordinary payment costs into overall prices, compare merchant fees, and avoid separate card-triggered charges. If a price rise reflects several business costs, say that. Do not blame the whole increase on card surcharging changes unless that is genuinely the reason.
Practical next step for business owners
Before changing prices, complete a card cost audit for the last three months. Check actual card fees, provider charges, payment method mix, and every place customers see a price. Then update your pricing, signs, website, invoice templates, booking pages, and staff scripts together.
FAQs
Q1. Can Australian businesses raise prices after card surcharges are banned?
A1. Yes, businesses can generally set, raise, and lower their prices. The key issue is how the price is displayed and explained. If the increase reflects several costs, such as wages, rent, materials, and card acceptance, the business should not claim it is only because card surcharges were banned.
Q2. Can a business offer a cash or PayID discount instead?
A2. Yes, payment method discounts may be offered if they are clearly disclosed before the customer chooses to book, order, or pay. The full price should be clear and should not be less prominent than the discounted price.
Q3. Can a business add a service fee instead of a card surcharge?
A3. A genuine service fee may be different from a card surcharge, but the label alone does not decide the issue. If the fee is really triggered by paying with a card, renaming it may create misleading conduct risk. Businesses should get professional advice if they are unsure.
Q4. Should a business increase every price by the same percentage?
A4. Not always. A flat increase may be simple, but it may not fit every product or service. A better approach is to review actual card costs, margins, customer sensitivity, and competitor pricing before deciding whether to adjust all prices or only selected prices.
By: Raxan.net Editorial
About the author: Raxan.net Editorial publishes practical small business, marketing, technology, and compliance-focused guides for business owners and operators.
Last updated: 2026-10-03
Disclosure: This article is general information only. It is not legal, financial, accounting, or payment provider advice.
Disclaimer
This article provides general information for Australian business owners and consumers. It does not provide legal, accounting, financial, or payment provider advice. For specific pricing, contract, tax, or compliance decisions, speak with a qualified professional or your payment service provider.
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