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Aug 15, 2026
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The ability to surcharge is going. Here’s what it could mean for your bottom line, and how Xero is helping
What’s changing
From 1 October 2026, Australian businesses will no longer be able to add a surcharge to eftpos, Visa, Amex or Mastercard payments. It’s a Reserve Bank of Australia reform, and it’s being enforced through the card networks themselves, so from that date the option to add a fee at checkout simply won’t be there anymore for those card types.
If you’re one of the many Australian businesses currently passing on some or all of the card fee to your customer, this increases the cost of each sale. The good news is you’ve got time to plan for it properly.
What this means for your Xero organisation
If you use Xero to send invoices with a card surcharge applied, this will stop automatically on 1 October – you don’t need to do anything. Card payments keep working as normal, your customers just won’t be charged the processing fee on top and it will disappear from the invoice.
If you have unpaid invoices already out with a surcharge on them, those will be updated too. When your customer pays on or after 1 October, they’ll pay the invoice amount without the fee added.
The option to pass on processing fees will also disappear from your Online payments settings entirely. If you’d prefer to stop surcharging before the deadline, you can turn it off yourself anytime.
Considerations
For many small businesses, the ability to pass on card fees is not just about covering costs, but is a part of a larger set of decisions on what payment methods to offer. Things like how you price, what payment methods your customers expect, and how that impacts when you get paid. This flows on to admin, time you spend chasing payments, and reconciliation.
There isn’t a single right answer – it will depend on your margins, your customers and how you compete. Here are some paths worth thinking through before October.
Build the cost into your price
Work the fee into your list price or hourly rate rather than adding it at checkout. This is simple for your customers to understand, though for some price rises might not be competitively viable. Another thing to consider: not every customer needs the same response. Some businesses choose to absorb the cost for regular, reliable clients and price differently for one-off or higher-risk work.
The RBA has been clear that this isn’t just a naming exercise. A “cash discount” or “card handling fee” that happens to land exactly where the old surcharge did is the kind of workaround the ban is specifically designed to catch. Whatever path you choose, make sure it’s a genuine pricing decision.
Absorb it as a cost of doing business
For some businesses, the fee is small next to what faster payment already saves in reduced chasing and admin time. Getting paid in two days by card, instead of chasing an invoice for three weeks, has a real value in admin time and in your own cash flow. It’s worth looking at the total cost of getting paid, not just the processing fee in isolation.
Offer a broader range of lower cost payment methods
The more ways you give customers to pay, the more you can shift the overall mix toward lower cost methods. Direct debit and PayTo, for example, typically carry a lower processing fee than card payments and settle quickly – so you’re not trading speed for cost savings. We know that choice matters to your customers, in fact 86% of consumers say they would rather pay by card.* If they can pay however it suits them they are more likely to pay on time.
Finally, your accountant or bookkeeper is the right person to help you think through a pricing or cash flow change like this, since they know your numbers better than anyone. Consider setting up a conversation with your trusted advisor before October, as you plan.
*Survey conducted by Xero of 6,021 consumers and 2,547 small businesses globally using Xero, May 2024
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