What changed
Until 30 September 2026, a business that accepted a card payment could add a surcharge to recover its merchant fee. The customer who wanted to pay by card paid for the privilege. From 1 October it cannot. The Reserve Bank's review of merchant card payment costs removed the right to surcharge on Visa, Mastercard and eftpos, across credit, debit and prepaid, consumer and commercial.
No exemption for business to business
The rule is about the merchant, not the customer. A supplier accepting a card from another business is a merchant, and the ban applies.
Not by invoice date
An invoice issued in September and paid by card in October cannot carry a card fee, whatever the invoice terms said when it was raised.
Only the recovery went
The acquirer still charges the merchant fee on every card transaction. What changed is who can be asked to pay it. A business may build the cost into its prices or offer a discount for other ways to pay.
One practical consequence before any of the commercial ones. If your invoices still carry surcharge wording from before October, your team may be collecting a fee it no longer can. That is a compliance question before it is a margin one.
The same ruling is why the ATO announced the next day that it would stop accepting credit cards after 30 November, a decision the government has since funded it to defer until 30 June 2027. The ATO could choose to walk away from the card, and for a week it did. Most suppliers cannot.
Where the cost landed
Nothing in the ruling reduced the cost of accepting a card. On a commercial credit card the interchange cap alone is 0.8%, with the acquirer's margin on top. That cost used to sit on the customer's side of the invoice as a surcharge line. On 1 October it moved to the supplier's side as a reduction in margin, with no change to the invoice, the terms or the price.
The exposure is on commercial credit cards. Debit interchange is now capped low enough that the margin effect is marginal, so the question is not whether to keep taking cards. It is what to do about the credit card payments specifically.
A supplier with a card-heavy customer base, $40 million of annual receipts and 15% of them paid by credit card was recovering the fee on $6 million of card payments. At a blended merchant cost of 1.2% that is $72,000 a year that moved from customers to margin on 1 October. For a business on a 6% net margin, that is the profit on $1.2 million of sales.
The customers who pay by card are not a random sample. They are often the ones managing seasonal cash flow, using the card cycle to pay on the due date rather than after it. They are the customers a credit controller least wants to lose, and they are the ones now ringing to ask whether they can keep paying the way they always have.
The three obvious responses, and what each one costs
Every supplier that accepts cards is working through the same three options. None of them is free, and the cost of each lands on a different group.
Costs the supplier
Prices and terms unchanged. Customers notice nothing. Margin falls on every card payment, indefinitely, and the card handling and PCI obligations stay in the business.
Costs everyone else
Margin held. Every customer pays more, including the majority who pay by bank transfer and were never the reason for the fee. The customers subsidising the cards are the ones who did nothing to cause it.
Costs the card payers
Margin held, prices unchanged, card handling ends. The customers who relied on the card cycle lose it, and the realistic alternative for some of them is not a bank transfer on the due date. It is a bank transfer later.
The honest summary is that the ruling moved a cost without removing it, and the three responses available to a supplier are three different decisions about who should carry it. Absorbing it is the only one that keeps every customer whole, and it is the only one that comes entirely out of the supplier's own pocket.
Why this will not settle down on its own
Two things make this different from most regulatory changes a finance team absorbs and forgets.
The first is that the customers affected are self-selecting. The ones who pay by card do so because they have worked out what the card cycle is worth to them. They are the customers most likely to ask, most likely to notice a price rise and most likely to pay later if the option is withdrawn.
The second is that the cost is permanent and invisible. A surcharge line on an invoice was a number somebody could see. A margin reduction spread across every card payment is not. It will not show up as a line item anywhere. It will show up as a gross margin percentage that is slightly lower than last year with no obvious cause, which is exactly the kind of leak that takes a long time to find.
There is a fourth route
The surcharge rule applies to a business that accepts cards. It says nothing about a business that does not accept cards and whose customers choose to pay a third party by card instead.
That is the basis of the fourth option. A business payment provider sits between supplier and customer. The customer pays the provider by card and pays the provider for the service. The provider pays the supplier by bank transfer, in full. The supplier never accepts a card, so there is nothing to surcharge and no merchant fee to absorb. The customer keeps the card cycle. Prices and terms stay where they are.
It is not a universal answer. It suits suppliers with a meaningful share of receipts on card and customers who value the cycle enough to pay for it. For a supplier with 2% of receipts on card and a loyal base paying by bank transfer, absorbing the fee may well be the cleaner decision. The point is that there are four options on the table and most of the commentary has stopped at three.
How the fourth option works in practice
The Flow Receive page sets out the mechanism, what changes for you and your customers, and what we need from you to join. If your credit controllers are already taking the calls, it is a short read.
Sources: Reserve Bank of Australia, Review of Merchant Card Payment Costs and Surcharging, Conclusions Paper, March 2026. Commissioner of Taxation statement on credit cards, 2 October 2026. Worked figures are illustrative.