The days of adding “+1.5% for card payments” are numbered.

From 1 October 2026, reforms implemented by the Reserve Bank of Australia (RBA) will change the rules governing card payment surcharges.  The reforms allow designated card networks – currently EFTPOS, Mastercard, and Visa – to impose “no-surcharge” rules under their network arrangements for debit, prepaid and credit card payments processed through those networks (the Reforms).  

Practically, this is expected to result in those designated card networks prohibiting surcharges on payments processed through their networks, meaning businesses will likely no longer be able to add surcharges to EFTPOS, Mastercard or Visa card payments.  This marks a major shift in Australia’s payment landscape and is expected to affect businesses that accept those card payments.

While the Reforms aim to simplify costs for consumers, they also impose new compliance risks for businesses.  Existing references to card surcharges relating to payments processed through designated card networks – for example, in contracts, website terms, invoices, or payment systems – may need to be carefully reviewed and, where necessary, updated to reflect the Reforms.  For online businesses, where transactions are almost entirely card‑based, this change will require particular attention.

This blog breaks down the essential steps businesses must take before the Reforms take effect from 1 October 2026.

What’s Changing?

Currently, businesses can lawfully pass on card acceptance costs by adding a surcharge, provided that surcharge reflects actual amount it costs the business to accept that type of card for that transaction.  From 1 October 2026, EFTPOS, Mastercard and Visa will be able to enforce “no‑surcharge” rules under their network arrangements, which is likely to result in businesses being unable, in practice, to recover card acceptance costs through surcharges on payments processed through those networks.

The Reforms also introduce:

• ‍Lower interchange fee caps – new caps will apply to interchange fees within designated card networks.  This is expected to reduce the fees payable to issuing banks and, in practice, the costs passed through to merchants via acquiring banks and payment service providers, lowering the overall cost of accepting card payments for businesses.
• ‍Greater fee transparency – from April 2027, designated card networks will be required to publicly disclose their fee structures, making it easier for businesses to understand and compare card payment costs.

Note: The Reforms apply only to designated card networks (currently EFTPOS, Visa and Mastercard).  They do not currently apply to other card networks or payment methods, including American Express, which will continue to operate under their current fee and surcharging arrangements.  The RBA has foreshadowed a further review later this year that may revisit this position.

Key Steps to Prepare for the Reforms

Step 1: Monitor Updates from Your Payment Service Providers

Businesses should monitor communications from their payment service providers, acquiring banks and payment platforms.  These updates are likely to clarify how and when surcharging will be removed in practice, including whether changes will be implemented automatically or require action by the merchant (such as updating platform settings or accepting revised merchant terms), as addressed further in Step 3 (Update Systems and Platforms) below.

Understanding how your providers intend to implement the Reforms will help inform the timing and scope of any changes required across your business.

Step 2: Review and Update Key Documents

The next step in complying with the Reforms is a targeted review of your key contracts, terms and payment documentation.  Any language that authorises or describes card surcharges on debit, prepaid and credit card payments processed through EFTPOS, Mastercard or Visa will likely need to be removed or updated to align with the Reforms.

The following are examples of documents that frequently include surcharge provisions and should be reviewed carefully for compliance with the Reforms.  The examples focus on the removal of surcharges for payments processed through the card networks designated under the Reforms - being EFTPOS, Visa and Mastercard.  It is important to note that a business’s ability to apply surcharge fees for other payment methods and networks (such as American Express) are not part of the Reforms.

     Website terms & conditions / online checkout pages

• What to check: Look for references like “a 1.5% card surcharge applies at checkout” or “credit card payments incur a fee.”
• What to amend or update: Delete or replace with wording that makes it clear that prices for EFTPOS, Visa and Mastercard transactions already include any payment costs, e.g. “Prices displayed are inclusive of all payment processing fees for EFTPOS, Visa and Mastercard transactions.”

     Invoices and quotes

• What to check: Review payment and footer sections for any mention of card fees.
• What to amend or update: Remove clauses such as “A 2% merchant fee will be added for EFTPOS, Visa or Mastercard transactions.”  Ensure total invoice amounts already include these card processing costs where applicable.

‍     Standard terms of sale or service agreements

• What to check: Review payment clauses for any wording that allows you to charge or recover card surcharges.
• What to amend or update: Replace provisions that authorise a surcharge (e.g. “The Customer must pay any credit card fees charged by the Supplier’s bank”) with compliant alternatives (e.g. “All amounts are payable as stated on the invoice”).

     Refund and pricing policies

• What to check: Review for any mention of separate surcharges or fees that won’t be refunded.
• What to amend or update: Amend statements like “card surcharges are non‑refundable.” Use neutral language about refunds that does not assume a separate surcharge applies to affected card payments.

‍     Supplier, franchise or merchant agreements

• What to check: Check for clauses that assume you may or must pass on surcharges to customers.
• What to amend or update: Amend these to clarify that card processing costs for designated card networks are incorporated into your prices, rather than recovered through a surcharge.

     Third‑party or platform payment terms

• What to check: Review terms with marketplaces, booking systems, or payment gateways that process transactions for you.
• What to amend or update: Confirm whether those platforms intend to remove all card surcharges to EFTPOS, Visa or Mastercard transactions in line with the Reforms, and seek contract updates where applicable.

Step 3: Update Systems and Platforms

Once your documents are in order, the next step is to turn to the operational systems that implement your payment processes.  This is where any changes flagged through the communications identified in Step 1 will need to be reflected in practice.  Even where your legal terms are compliant, outdated software or platform settings can unintentionally keep applying surcharges in ways that are inconsistent with the Reforms.  Examples include:

• E‑commerce and checkout systems: Disable any automatic “card fee” or “merchant fee” settings that apply to EFTPOS, Visa or Mastercard transactions in platforms like Shopify, WooCommerce or Stripe.  Confirm that checkout totals for those transactions now reflect one all‑inclusive price.
• Point‑of‑sale and invoicing software: Check templates and system rules to ensure no residual percentage or fixed “credit card fee” is added at the point of payment for EFTPOS, Visa or Mastercard transactions.
• Subscription or recurring billing: Identify automated scripts or application settings that calculate card surcharges.  Update those settings and the renewal communications that accompany them to ensure they no longer refer to or apply surcharges for affected card payments.
• Accounting and ERP systems: Review integrations (e.g. Xero, MYOB, or NetSuite) to verify imported invoice data and payment descriptions no longer reference surcharges for EFTPOS, Visa or Mastercard transactions.

Step 4: Communicate and Train for Compliance

Once your updated documents and systems are in place, focus on implementing the new approach across your business from 1 October 2026.  For example, educate staff who issue invoices, quotes, or process payments, and update customer‑facing templates and scripts to ensure references to card surcharges are removed where required by the Reforms.  Strong internal communication and basic training will help prevent inadvertent breaches once the Reforms take effect.

Act Now: Prepare Early and Engage Expert Legal Support

Although the Reforms do not take effect until 1 October 2026, early preparation is essential.  Waiting until the last minute increases the risk of non‑compliance, contractual issues, and costly system changes under pressure.

At Sierra Legal, we work with businesses every day across a broad range of sectors to navigate regulatory change.  We understand how payment terms flow through your contracts, systems, and customer interactions – and how to implement those changes in a way that is both legally sound and commercially practical.

How Sierra Legal Can Help

Our team can:

• Conduct a targeted review of your payment‑related documents, agreements, and online terms.
• Draft and, where needed, negotiate updated clauses and policy wording to ensure full compliance with the Reforms.
• Provide practical compliance training for staff and management.

Taking early, legally informed action will help your business transition confidently and avoid disruption or enforcement risk when the Reforms take effect in October 2026.

Contact the team at Sierra Legal today to discuss how the Reforms will affect your business.