Lost your surcharge revenue? Here’s the six-move fix — Dynamic Business

Surcharges are gone. Here’s why one strategist says that’s good news for SMEs

Raffy Sgroi has never added a surcharge to a customer’s bill. Not in her mechanical services business, not anywhere. “When customers realise that the price they see is the price they pay, they appreciate it,” says Sgroi, a small business strategist and founder of Sage Advice.

As of 1 October 2026, every other Australian business has had to catch up. Under reforms from the Reserve Bank of Australia, surcharges are banned on card payments made through eftpos, Mastercard and Visa. The central bank has also removed its own long-standing rule stopping card networks from setting “no surcharge” policies of their own, and all four major networks, including American Express, have since adopted one.

What actually changed

The ban only applies to fees charged specifically because someone paid by card. A weekend loading, a public holiday surcharge or a booking fee is untouched, it’s the separate “card payment” line item that’s gone. According to the RBA’s own figures, Australians were paying an estimated $1.6 billion a year in these fees, a cost the regulator argues had become confusing and poorly targeted as cash use declined.

For business owners, the sting isn’t that the rule changed. It’s that the underlying cost of accepting cards hasn’t gone anywhere. “Rent, insurance, software, compliance, training, merchant fees and countless other expenses all contribute to the cost of delivering a product or service,” Sgroi says. “These costs don’t disappear because the rules change.”

Higher prices aren’t the fix

Since the ban took effect, there’s been concern that some businesses will simply raise prices to claw back what they lost. Sgroi isn’t against adjusting prices, she just wants owners doing it for the right reason. “Increasing prices without understanding the numbers is not a strategy,” she says. “It’s guesswork.”

Her line is that businesses can build legitimate payment costs into their overall pricing, but shouldn’t blame a single price rise entirely on the surcharge ban if several costs are actually behind it. “The real question isn’t whether businesses should charge more or less,” she says. “It’s whether they’re charging appropriately for what they deliver.”

A second rule just hit too

The surcharge ban isn’t the only change moving through the payments system right now. Dynamic Business reported that the Australian Taxation Office will stop accepting credit card payments for tax bills, including BAS, PAYG and income tax, after 30 November 2026, a separate decision that stems from the same review into card payment costs.

Most businesses won’t feel it. The ATO says only around 2.3 per cent of tax payments were made by credit card in the 2024-25 financial year, and the majority of those came from large and wealthy entities rather than typical small operators. But for the smaller group that does use a credit card, often deliberately, to buy a few weeks before the statement is due, the change closes off a genuine cash flow tool.

The Council of Small Business Organisations Australia has pushed back on the timing. “This change comes at a pressured time for small businesses, with many already managing high costs, tight margins and competing financial obligations,” COSBOA chief executive Skye Cappuccio said, as reported by Dynamic Business. She’s asked the ATO to give businesses on existing credit-card payment plans room to adjust. “Businesses acting in good faith should be given reasonable flexibility to transition to another payment method without unnecessary disruption or penalties,” Cappuccio said.

It’s a version of the same warning Sgroi raises about surcharges and debt. She’s seen business owners put tax bills on a credit card to buy time when cash flow is tight. “This isn’t about judging business owners under pressure,” she says. “It’s about recognising when the numbers aren’t working and seeking professional advice before liabilities become harder to manage.”

Sgroi also argues banks and payment providers carry some of the responsibility here, not just merchants. Alongside the surcharge ban, the RBA has lowered interchange fee caps, the behind-the-scenes fees banks charge each time a card is processed, and introduced new transparency requirements for merchant costs. The intent is to help businesses negotiate better deals, but Sgroi says that only works if owners actually review their current provider rather than blockuming it’s competitive.

Six ways to reprice

Sgroi’s advice for owners reviewing their pricing in response to the ban comes down to six steps:

• Calculate the true cost of delivering each product or service, including wages, overheads, payment fees and admin time.

• Work out the break-even point, then check whether sales targets and margins are actually realistic.

• Review the current payment provider, comparing merchant fees and transaction costs against what’s available elsewhere.

• Schedule pricing reviews quarterly, rather than waiting for rising costs to erode margins.

• Keep entry-level offers accessible where possible, while making sure larger, more complex jobs reflect their real cost and risk.

• Price for value, not just cost, accounting for expertise, convenience and outcomes delivered.

“The goal isn’t to absorb every cost or increase every price,” Sgroi says. “It’s to build a business that understands its numbers, values its work and prices accordingly.”