Card surcharging ends on 1 October: what it means for hospitality businesses

From 1 October 2026, businesses will no longer be able to add a surcharge when customers pay using eftpos, Mastercard, Visa or American Express. For hospitality operators, this is a significant change to how the cost of accepting card payments is recovered.

At BOSSII, we understand why customers dislike seeing an extra fee added at the end of a transaction. But removing the surcharge does not remove the merchant fee. The business still pays to accept the card, and that cost still needs to be covered.

For many venues, the practical question is whether to absorb the cost, negotiate a better payment rate or adjust menu prices. If a venue increases its prices to cover payment costs, customers may still pay for those costs indirectly, including customers who pay with cash. That is the part of this change we believe deserves more attention.

Since the RBA announced its decision, we have spoken with payment providers about what their merchant rates might look like after 1 October. Providers have generally been cautious about committing to rates early. Now that merchants will be looking more closely at the fees they pay, we expect competition for their business to intensify.

We have seen blended rates around 1% discussed in the market, but the rate that matters is the one your business actually pays. It can vary with your transaction mix, card types, turnover, equipment and provider agreement. An attractive introductory rate also needs to be assessed against what you will pay when the introductory period ends.

Our advice to hospitality operators is to review your merchant statement now, then check your effective rate again in six and twelve months. Look at the total cost of accepting payments, including transaction fees, terminal charges and any other account fees. If you receive a new offer, compare it against your actual card sales rather than the headline rate alone.

Finally, check your menus, counter signs, online ordering pages and website for references to card surcharges. Speak with your payment provider about how surcharging will be removed from your terminals, and make sure your staff know what customers should be charged from 1 October.

Card surcharging may be ending, but payment costs are not. Knowing your real costs and reviewing them regularly will help you make a sound decision for your venue.