Australian businesses add ‘service fees’ after Oct 1 card surcharge ban
Australian businesses began adding ‘service fees’ to customer bills after the card surcharge ban took effect on October 1. The Reserve Bank estimates that consumers paid about $1.6 billion in card surcharges during the 2024-25 fiscal year.
The ban, enforced by Visa, Mastercard, Eftpos and American Express, prohibits merchants from adding a separate charge for card payments, though genuine service or booking fees unrelated to payment method remain allowed. The ACCC warns that relabelling a card surcharge as a ‘service fee’ may constitute misleading conduct if the charge is triggered solely by using a card. Businesses may absorb the card‑processing fees, negotiate cheaper rates with payment providers, or incorporate the costs into the base price of goods and services. Some cafes and restaurants have responded by raising menu prices on October 1 to cover ongoing expenses, potentially shifting the burden to cash‑paying shoppers unless a discount for alternative payments is disclosed.
Before October 1, merchants could add a surcharge to card transactions, a practice the Reserve Bank said applied to about 16% of businesses and generated roughly $1.6 billion in annual consumer payments. The Reserve Bank’s guidance now bars Visa, Mastercard, Eftpos and American Express from permitting such surcharges, aiming to eliminate hidden card‑payment costs. Although large retailers generally did not apply surcharges, many small cafes, grocers and online stores relied on the fee to offset card‑acceptance expenses.
What we know
Card networks Visa, Mastercard, Eftpos and American Express no longer allow businesses to add a surcharge for card payments from October 1.
Australia’s card surcharge ban took effect on October 1.
About 16% of businesses had card surcharges before the ban.
Consumers paid about $1.6 billion in card surcharges during 2024-25.
A Reddit user reported a $17 purchase showed $17.30 after tapping a card, a 30‑cent increase.