The RBA surcharging ban: what it means for your business
From 1st October 2026, Australian businesses can no longer pass on payment surcharges for EFTPOS, Visa or Mastercard transactions.
This Reserve Bank of Australia (RBA) reform is enforced directly through the payment networks, meaning it applies to every business processing card payments, regardless of your bank or merchant provider.
Here is what is changing, how software like Xero will handle it, and how to prepare.
What the Change Means for Your Operations
The core rule is simple: customers cannot be charged an extra fee for paying by card.
The RBA has made it clear that workarounds will not comply. Renaming the fee to a "card handling charge" or offering a "cash discount" that mimics the old surcharge is prohibited.
Businesses have two practical choices: absorb the merchant processing fees as an operational cost or adjust baseline pricing to protect margins.
What Happens in Xero
If you use Xero for online invoicing, the transition is automatic:
Surcharges stop automatically: Surcharges disappear on 1st October, while card payments continue to process as normal.
Unpaid invoices update: Any invoice issued before 1st October and paid on or after the deadline will automatically have the surcharge line removed.
Settings update: The option to pass on fees will be removed from your online payments settings.
You can also manually turn off surcharging in your Xero settings before 1st October if you prefer to make the switch early.
What to Do for Other Payment Terminals
Physical EFTPOS terminals, card readers and third party e-commerce gateways outside Xero will not update automatically. You must contact those merchant providers directly to ensure surcharges are disabled on your hardware before 1st October.
Steps to Take Now
Calculate your total surcharges: Look at how much you collect in surcharges each month to see the exact cost you will need to absorb or offset.
Contact your hardware providers: Confirm when and how your physical EFTPOS terminals will disable surcharges.
Review your pricing: If absorbing fees hurts your margins, review your general pricing structure well before the deadline.
Ready to protect your bottom line?
You don’t have to navigate regulatory updates or margin adjustments alone. Reach out to our team today to review your payment costs, model your numbers and ensure your business is fully prepared beforehand.
This information is intended to be general in nature and is not personal financial advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided in relation to your own circumstances.
