Update, 13 October 2026. This article was first published after the Commissioner's statement of 2 October. On 9 October the ATO announced that, following discussions with the government and the provision of transitional funding, it will continue to accept credit card payments until 30 June 2027. The facts below are updated. The original analysis of what withdrawal means for cashflow stands, because the ATO has said it will consult on options before mid-2027 and has pointed taxpayers who want to keep paying by card after that date to third-party payment providers.
What this means in practice: the ATO's own card channel stays open for another eight months, at no fee to the payer. Nothing has been decided about what happens after 30 June 2027.
Background
For years Australian businesses could pay the ATO by credit card and be charged a card payment fee for doing so. The fee was a surcharge, set per card type, and it covered the ATO's merchant costs. In return the business got the use of its card cycle: the ATO was paid on the due date and the cash left the business when the card statement fell due.
That arrangement depended on the ATO being able to pass its card costs to the payer. On 1 October 2026 that stopped being allowed, and nine days of announcements followed.
What changed
RBA surcharge ban takes effect
Merchants can no longer add a fee for paying by eftpos, Mastercard or Visa. Covers debit, prepaid and credit, consumer and commercial. Interchange caps change too: consumer credit falls to 0.3%, commercial credit stays at 0.8%.
ATO announces credit card withdrawal
The Commissioner cites almost $200 million a year in merchant fees the ATO can no longer recover and does not consider appropriate to pass to the community. Credit cards to stop after 30 November. Two month transition, no consultation paper.
Government funds an extension to 30 June 2027
The Treasurer announces transitional funding so the ATO can keep accepting credit cards until the end of the financial year. The cost is to be finalised in the mid-year budget update. The ATO says it will consult stakeholders, look at options for taxpayers who cannot pay another way, and keep talking to the card schemes about lower rates.
Not yet decided
The ATO has said that taxpayers who want to continue paying by credit card after that date can use third-party payment providers, and should consider fees, charges and processing timeframes. Debit cards, BPAY, direct deposit and Australia Post remain in any case, and every one of them takes the cash on the day the payment is made.
Who was using it, from the Commissioner's statement.
- Around 5% of small businesses paid tax by credit card in 2024-25
- More than 60% of credit card payments by value came from privately owned and wealthy groups, public companies and multinationals
What it means for cashflow if you were using it
For now, nothing. The ATO card channel works as it did, and without the surcharge it carried before October. If withdrawal goes ahead from 1 July 2027, tax cash leaves on the lodgement date instead of the card statement date. Nothing else changes. The amount is the same, the due date is the same, the working capital you were holding in between is gone. The illustration below is what was at stake in December and is what is at stake again next July.
A business with a $3 million quarterly BAS and a 45 day card cycle has been holding $3 million for 45 days after every lodgement. Without the card channel it does not.
That is 45 days of $3 million, four times a year, and the drop lands on dates that often sit close to quarter end and reporting dates. The first lodgement after 30 June 2027 falls in the July BAS cycle.
The substitutes if the channel closes, and what each one costs
- Debit card. Does not replace it. A debit payment leaves your account the day you make it.
- Draw the facility. It works, and on headline rate it may well be cheaper than a card. The comparison only holds once the card rebate is netted off, which is why the number has to be run on your own card programme rather than a generic one.
- Pay late. General interest charge applies and, since 1 July 2025, is no longer tax deductible.
- Absorb it. A permanently lower cash position on the dates that get measured.
The opportunity if you were not using it
Most businesses of any size never paid the ATO by card. The reason was governance, not mechanics. Nobody wanted to write the board paper explaining why $3 million of tax was on a credit card.
Through a merchant of record the board sees a settlement instruction with an audit trail, not a card transaction. The funding source changes. The payment, the approval and the record of it do not.
Tax is the cleanest payment to apply this to. The date is fixed by legislation, the amount is fixed by your own return and there is no counterparty relationship to manage. For a business measured on its working capital position at quarter end, separating the lodgement date from the date cash leaves is worth more on a tax payment than on a supplier invoice of the same size.
How business payment providers keep card payments going
The ATO's decision, whichever way it goes in 2027, is about the ATO as a card merchant. It does not restrict how a business funds the payment that reaches the ATO. The ATO's own 9 October statement makes the same point: after June 2027, taxpayers who want to keep using a credit card can do so through a third-party provider.
A business payment provider sits between the two. The provider is the card merchant. It charges the business's commercial card and pays the ATO through a channel the ATO accepts, such as BPAY or direct deposit, on the due date. The ATO sees an ordinary on-time payment. The business sees a card transaction that settles on its statement date.
- Does the ATO receive the funds in full, on the due date, through its own channel? If not, it is a deferral and your compliance position changes.
- Who holds the merchant position and the card data? If it is you, the operational burden is yours.
- What is the net cost after your card rebate, and does the value of the days exceed it?
How GlobalFinex B2B can help
Through Flow: ePayment, or Flow Direct if you would rather enrol and pay without an integration, GlobalFinex B2B is the Merchant of Record. Our fee is a service charge for settlement, not a card surcharge, and the RBA ban on surcharges does not change it.
You confirm the liability
Your return is prepared and lodged exactly as it is today. The amount and the due date come from your own filing. Your team confirms the liability and the due date, nothing more.
We pay the ATO on time
The ATO is paid in full on the due date through a channel it accepts. Your filing position does not move. It is not a deferral, a payment plan or an arrangement with the ATO.
Your cash leaves later
Your commercial card funds the settlement inside our managed environment. Cash leaves when the card statement falls due. Any rebate your card programme pays, you keep.
Three lines decide whether this is worth doing:
- Settlement fee per cycle
- less the rebate your card programme pays
- equals the net cost of holding the cash for your card cycle
Annualise that and set it against your facility rate for the same days. Your card programme sets two of the three numbers, so we run it on your programme and put the net in front of you before anything is set up.
The outflow moves from your bank statement to your card statement. The instruction, settlement and reconciliation sit in one audit trail.
Card headroom is the practical constraint. A $3 million payment needs a limit behind it, and whether your existing facility is sized for your lodgement peaks is one of the first things we confirm.
Method only. Pace: Dynamic Discounting does not apply because a revenue authority does not discount. This is Flow on its own, applied by entity and by quarter, reversible with no unwind. Deciding it is not worth it for your profile is a valid outcome.
The window now closes on 30 June 2027, or later if the review extends it again. Either way the decision is the ATO's and the government's, not yours, and it can move at a week's notice as it did in October. If card settlement of tax is part of how your business manages its lodgement peaks, the useful thing to know before next June is what the route looks like when it does not depend on the ATO's terminal: which obligations, on what cycle, how large against your reporting dates.
The date cannot move. The funding can.
The tax payments page sets out the mechanism, the governance controls and where it matters most. To run the net cost on your own card programme before the 2027 review, contact the team. We confirm what is available for the obligations you pay before anything is proposed.
Sources: Commissioner of Taxation statement on credit cards, 2 October 2026. ATO media release, "ATO extends transition period for taxpayers using credit cards until 30 June 2027", 9 October 2026. Treasurer's announcement of transitional funding, 9 October 2026. Reserve Bank of Australia, Review of Merchant Card Payment Costs and Surcharging, Conclusions Paper, March 2026. ATO card payment fees as published before 1 October 2026. Worked figures are illustrative. Availability of card-funded settlement for any revenue authority is confirmed case by case and can change.