Card surcharges are disappearing from 1 October

Paying by card is about to become simpler, with a major change to surcharging taking effect across Australia from 1 October.

From that date, businesses will no longer be able to charge customers a surcharge for using prepaid, debit and credit cards on the Visa, Mastercard, American Express and eftpos networks.

The federal government said Australians currently pay about $1.6 billion in card surcharges each year, with around 16% of Australian businesses collecting them.

For consumers, the change should mean fewer surprises when it comes time to pay. Rather than seeing a price and then being charged an extra percentage for tapping or inserting an eligible card, you'll generally pay the advertised price.

Does this mean prices will fall?

Not necessarily.

Businesses will still face costs for processing card payments. The difference is that, rather than passing those costs directly to customers through a separate card surcharge, businesses can incorporate them into their overall prices.

For example, the Australian Competition and Consumer Commission (ACCC) says a hair salon that currently charges $60 for a haircut plus a 1% credit card surcharge could instead charge $60.60 for the haircut from 1 October.

Businesses can also offer discounts for particular payment methods, such as cash or PayID, provided the pricing is displayed appropriately.

The new rules apply specifically to card payment surcharges. Other charges, including booking and delivery fees, can still apply, while hospitality businesses can continue charging weekend and public holiday surcharges.

For households, removing card surcharges is one small change that could make everyday spending more transparent. But keeping an eye on the total amount you're spending remains important, regardless of how you pay.

Small changes to everyday expenses can add up over time – and your overall spending can also affect your borrowing power. Planning a property purchase? Get in touch and we can help you understand how much you may be able to borrow.