Australia's Card Surcharge Ban: SMEs Face a Pricing Decision, Not Just Compliance

From 1 October, the cost of accepting card payments does not disappear for Australian small businesses. For many, it simply moves: into margins, into prices or into a new conversation with customers. That makes the card surcharge ban more than a compliance change – it is a pricing decision with a deadline.

That is what small businesses told MYOB at a recent webinar on the incoming surcharging changes. Their questions were not philosophical. They were practical.

When MYOB asked what was most on owners' minds, 37 per cent pointed to managing the cost in their pricing and another 36 per cent went straight to the hit on margin. Nearly three in four respondents were wrestling with the same problem: what does this do to my margin and what do I need to do before 1 October?

The good news, according to Sally Davies, GM Solo and Embedded Finance at MYOB, is that most owners understand the mechanics. Only 11 per cent said they were still unclear on the details of the change. The real gap is deciding what to do next.

Who the change actually hits

MYOB's polling shows the change will matter most for businesses that currently surcharge. 62 per cent of small business owners said they surcharge most card payments, while a further 12 per cent surcharge some. For that group, 1 October is not just an administrative change – it's a pricing decision. For businesses that already absorb card payment costs or don't accept card payments at all, the practical impact will be limited.

For businesses that currently surcharge, the cost of accepting card payments should decrease from 1 October, as the Reserve Bank of Australia's changes include lower caps on interchange fees. But it won't vanish entirely. What remains must go somewhere: into the business's margin or into prices in another form. Both are valid choices, but they carry different consequences for profitability, competitiveness and how customers perceive value.

The polling suggests many owners have not reached a decision. When asked how they were preparing, the two most common responses weren't about pricing at all: almost 30 per cent said they were reviewing the payment methods they offer, while 29 per cent were still unsure what they would do. Only one in five had decided to adjust prices, and just 7 per cent had chosen to absorb the cost outright.

Walking away from card payments altogether would be a risky commercial move. By 2025, cash accounted for just 15 per cent of transactions, meaning customers increasingly expect to pay by card and may simply take their business elsewhere if they can't.

Run the numbers first

Before changing prices or absorbing the cost, MYOB advises businesses to get the number straight: how much does it cost to accept card payments, per transaction and across a typical month? It is also worth comparing that with the cost of other payment methods, including cash, where handling time, reconciliation, security and banking effort can often be overlooked. For many owners, the answer may be lower – or structured differently – than they expect.

Interchange fee reductions should bring costs down over time, but the full benefit is unlikely to land before 1 October. The RBA has published a detailed Q&A for businesses that want to check the detail.

The unglamorous admin still matters

The technical side should mostly take care of itself. Payment terminals, invoicing settings and point-of-sale systems are generally built to update automatically. The customer-facing details won't fix themselves: signs at the till, surcharge notes on menus, invoice wording and staff talking points all need checking.

It's basic admin, but it will shape how customers experience the change – and it's exactly the sort of thing that gets missed if it isn't on the list now.

Where to ask for help

The support small businesses want is practical, not theoretical. Of those looking for help, the biggest ask was understanding how the change will flow through the systems they use every day – invoicing, point of sale and reporting. Others wanted clearer visibility on how customers pay, or help answering customer questions.

"This is a pricing and margin call, so don't guess," Davies writes. "Talk to the person who knows your numbers. Your accountant or bookkeeper can turn 'what does this cost me?' into 'what should I charge?' – and spot industry-specific issues a rule of thumb won't catch."

The Australian Payments Network and the Australian Banking Association have published guidance for businesses, and merchant banks and payment providers are releasing practical updates covering everything from POS hardware to surcharging settings.

Most of the technical change will happen in the background. The part that needs real attention is the human decision: what you charge, why you charge it and how you explain it. The small businesses that start with the numbers, get advice early and treat 1 October as a pricing decision – not just a compliance date – will be the ones that walk into October with a plan.