How the Card Surcharge Ban Could Affect Your Café, Bar or Restaurant
For years, card surcharges have been a normal part of doing business.
A customer orders a coffee.
Pays by card.
A small surcharge appears on the receipt.
From 1 October 2026, that will change.
The Reserve Bank of Australia (RBA) has confirmed that businesses will no longer be able to apply surcharges to payments made using Visa, Mastercard or eftpos.
For hospitality businesses, this means more than simply removing a line from the EFTPOS machine.
It may affect pricing, margins, cash flow forecasting and how you manage payment costs moving forward.
If you own a café, restaurant, bar, pub or hospitality venue, now is the time to prepare.
What Is Changing?
From 1 October 2026:
- Card surcharges will be banned on Visa, Mastercard and eftpos payments.
- Customers must see and pay a single all-inclusive price.
- Businesses will no longer be able to add percentage-based or fixed card fees at checkout.
- The reforms will apply across in-store, online and mobile payments.
At the same time, the RBA is introducing reforms aimed at reducing merchant payment costs and increasing transparency across the payments system.
The goal is to simplify pricing for consumers while reducing the overall cost of accepting card payments for businesses.
Why Hospitality Businesses Will Feel This More Than Most Industries
Hospitality businesses process a high volume of low-value transactions.
Think about how many times a day customers tap their card for:
- Coffee
- Breakfast
- Lunch
- Drinks
- Takeaway orders
- Bar tabs
Many venues currently rely on surcharges to recover at least some of their merchant fees.
When surcharges disappear, those costs don’t disappear. They simply become a business expense. For venues operating on tight margins, understanding the financial impact early is important.
The Good News: Merchant Costs Are Expected To Fall
The surcharge ban is only one part of the reform package.
The RBA has also announced:
- Lower interchange fee caps
- Greater fee transparency from payment providers
- Increased competition within the payments market
The expectation is that many businesses will see lower card acceptance costs over time.
However, the exact benefit will vary depending on:
- Your payment provider
- Transaction volume
- Average transaction size
- Merchant agreement
Some venues may see meaningful savings. Others may see only modest reductions. That’s why reviewing your current payment arrangements is essential.
Pricing Considerations For Cafes, Bars And Restaurants
The biggest question many hospitality owners are asking is:
Should we increase prices?
There is no universal answer. Some venues may choose to absorb the cost. Others may decide their pricing no longer reflects the true cost of doing business.
Before making any changes, consider:
1. Your Current Surcharge Revenue
How much revenue do surcharges currently generate?
Many business owners are surprised when they calculate the annual figure. Understanding the numbers is the first step.
2. Your Profit Margins
Hospitality margins are often under pressure from:
- Wages
- Superannuation
- Rent
- Utilities
- Food costs
- Insurance
Even a small reduction in margin can have a noticeable impact over a full year.
3. Competitor Pricing
Customers are generally more accepting of small price adjustments when pricing remains competitive and transparent. The focus should be on maintaining profitability without creating pricing shocks.
Cash Flow Considerations
The removal of surcharges may affect cash flow in several ways.
1.Short-Term Margin Pressure
Businesses that currently rely heavily on surcharge revenue may experience a temporary reduction in profitability. The earlier you identify the impact, the easier it is to plan for.
2. Changes In Customer Behaviour
Some venues may see an increase in card usage once surcharges disappear.
This can improve:
- Customer convenience
- Transaction speed
- Checkout efficiency
However, it may also increase total merchant processing costs if transaction volumes rise significantly.
3. Budget Forecasting
Now is a good time to update:
- Cash flow forecasts
- Profitability projections
- Pricing models
- Annual budgets
Understanding the likely impact before October gives you time to make informed decisions rather than reacting later.
What To Do Now
October may seem a long way away. It isn’t.
The most prepared businesses will start planning now.
1. Review Your Merchant Statements
Look at:
- Current merchant fees
- Surcharge income
- Total annual card processing costs
This provides a clear picture of your current position.
2. Speak With Your Payment Provider
The reforms are expected to create more competition among payment providers.
This may create opportunities to:
- Negotiate lower fees
- Review contract terms
- Explore alternative providers
- Upgrade payment technology
Many hospitality businesses have not reviewed their merchant arrangements for years.
Now is a good time.
3. Review Your Pricing Strategy
If surcharge revenue currently forms part of your profitability model, review whether your pricing remains appropriate.
Small adjustments made gradually are often easier to manage than larger adjustments later.
4. Update POS Systems And Signage
Before 1 October 2026, businesses will need to remove:
- Surcharge notices
- EFTPOS surcharge settings
- Online payment surcharges
- Checkout fee disclosures
All displayed prices will need to be inclusive.
5. Update Your Cash Flow Forecast
The businesses that manage change best are usually the ones that plan for it early.
Modelling different scenarios now can help you avoid surprises later.
What The Surcharge Ban Means For Hospitality Businesses
The end of card surcharges represents one of the biggest changes to Australia’s payments landscape in recent years.
For hospitality businesses, the change is about more than customer pricing. It’s about understanding how payment costs affect profitability, cash flow and business performance.
The good news is there is time to prepare.
- Review your numbers.
- Understand your costs.
- Update your forecasts.
- And make sure your venue is ready well before October 2026.
Need Help Understanding The Financial Impact?
At The Pen Accounting, we work with hospitality businesses across Sydney to improve cash flow, understand profitability and make informed financial decisions.
If you’re unsure how the surcharge ban could affect your venue, our team can help you model the impact and plan ahead.
FAQs
The current reforms prohibit surcharges on Visa, Mastercard and eftpos payments. Businesses will need to display a single all-inclusive price rather than adding payment fees at checkout.
Not necessarily. Some venues may absorb the cost, while others may adjust pricing. The right approach depends on your margins, transaction volume and merchant fees.
No. Businesses will still pay merchant processing fees. The difference is that those costs can no longer be passed directly to customers through card surcharges.
Review merchant statements, analyse surcharge income, update cash flow forecasts, speak with payment providers and assess whether pricing adjustments may be required.
Waiting until September 2026 to assess the impact. Businesses that understand their numbers early will have more time to adjust pricing, negotiate merchant fees and update their forecasts.
At The Pen Accounting, we specialise in helping creative businesses like yours achieve financial success. From bookkeeping to tax advisory and business strategy, our services are tailored to the unique needs of the creative sector in Australia. If you’re ready to take control of your financial records, contact us today and discover how we can help your business grow.
Disclaimer: This is general information only and is not advice of any sort. No warranty or representation is provided by The Pen Accounting as to the accuracy, currency or completeness of the information contained in this blog. Readers of this blog should not act or refrain from acting in reliance upon any information contained herein and must always obtain appropriate taxation and / or other advice as may be appropriate having regard to their particular circumstances.
