RBA Confirms End of Surcharging, Signalling Shift Towards Service-Led Payments
The Reserve Bank of Australia has confirmed a major shift in the local payments landscape. From 1 October 2026, card surcharging will be officially removed. This landmark decision marks a significant change in how Australian businesses manage payment costs and navigate the customer experience.
Under the new regulations, businesses will no longer be permitted to apply surcharges on Visa, Mastercard, or eftpos transactions. To help balance these changes for merchants, the RBA is also reducing interchange caps. Notably, the consumer credit interchange rate will decrease from 0.80 per cent to 0.30 per cent.
This decision follows an extensive consultation period involving industry peers, our partners, and the team at ZenPay. We remain committed to providing professional and reliable guidance as the industry transitions. We believe that simplicity in payments is key to building trust, and we are here to help our clients adapt their strategies to thrive under these new standards.
impact across industries
For a long time, surcharging has served as a practical way for businesses to recover the costs associated with card acceptance. Its removal will be felt across various sectors of the Australian economy, especially in industries where card payments are the standard for high-value or recurring transactions.
The impact of these changes will vary depending on your specific sector. In industries where margins allow for more flexibility, businesses may find it easier to absorb payment costs as part of a premium service offering.
On the other hand, sectors operating with tighter margins and fixed pricing structures will face a more significant challenge. For these businesses, the shift away from surcharging will require a strategic review of pricing models and payment workflows to ensure long-term sustainability.
Despite these changes, consumer habits remain clear. Data observed by ZenPay shows that card payments continue to be the preferred method for the majority of Australians. This means businesses must find a balance: managing the internal costs of transactions while still meeting the high expectations for convenience and flexibility that modern customers demand.
Costs reduced but no longer recoverable
While the upcoming reduction in interchange rates will lower some expenses, it won’t eliminate the cost of accepting card payments entirely. The key change is that businesses will no longer have the option to pass these costs directly to customers through surcharges.
At ZenPay, we predict this shift will further influence how people pay. Without the barrier of additional fees, we expect even more customers to choose card payments as their preferred method across various industries. This makes it more important than ever for businesses to have a streamlined, efficient payment strategy in place.
Kevin Butler, CEO of Zenith Payments, said the change represents a structural shift in how payments are managed.
“Businesses now need to think about how payment costs are absorbed and managed within their overall pricing and customer strategy. We’re working closely with our clients to help them navigate this shift.”
shift toward service, choice and flexibility
Industry experts expect the removal of surcharging to shift the focus from simple cost recovery to the overall quality of the payment experience.
Rather than relying on a single method, businesses are likely to offer a more strategic mix of options to balance cost, convenience, and customer preference. Lower-cost alternatives like PayTo, PayID, and bank transfers are expected to play a more prominent role alongside traditional card payments. Providing these flexible choices is the best way to meet customer expectations while managing your bottom line.
Paul Richardson, Chief Commercial Officer at Zenith Payments, said payment strategy will increasingly centre on customer experience.
“This change moves payments into a more service-led model, which aligns with how we’ve always approached payments at Zenith. It’s no longer just about what it costs to accept a payment. It’s about how you give customers choice and flexibility, while still protecting margin.”
designing payments around the payer
As surcharging falls away, how payment options are presented and experienced will become more important.
Businesses will need to balance:
- The cost of acceptance
- Customer expectations for convenience
- The need for seamless, low-friction transactions
lessons from global markets
Similar changes in markets such as the United Kingdom, where surcharging has not been permitted since 2018, demonstrate that card payments remain the preferred method for many customers — particularly where convenience and rewards are important.
Alongside this, there has been:
- Increased adoption of bank-based payment methods
- Broader payment choice at checkout
- Greater focus on integrated and embedded payment experiences
Rather than replacing cards, these changes have expanded the payment mix, giving customers more flexibility while maintaining strong card usage.
transition period ahead
With the changes set to take effect from 1 October 2026, businesses have some time to review and adjust their approach, including:
- Reviewing pricing and cost structures
- Expanding available payment options
- Ensuring payment experiences remain simple and seamless
ZenPay is working with businesses across multiple sectors to support this transition, particularly in optimising payment mix and integrating flexible payment options into existing systems.
a structural reset of payments
The removal of surcharging represents more than a regulatory adjustment. It signals a broader shift: from payments as a recoverable cost, to payments as a core part of service delivery. In this environment, how businesses enable customers to pay and the choices they provide will become increasingly important.
Talk about what this means for your business
We’re working with businesses and software providers to navigate these changes, optimise payment strategies, and balance cost, customer experience and flexibility.