The proposed debit surcharge ban is set to address an operational cost that many business owners would love to see disappear—paying surcharges on debit card transactions made by customers.

The good news for Australian businesses is that the Government is also keen to eliminate these costs. In October 2024, plans were announced to implement the debit surcharge ban from 1 January 2026, subject to a consultation undertaken by the Reserve Bank of Australia (RBA).

The key aims of the debit surcharge ban are to lower costs for consumers in an increasingly cashless economy and to reduce the surcharge burden currently faced by smaller consumer-facing businesses using EFTPOS for debit card payments. This ban is expected to streamline payment processing, simplify pricing for businesses, and improve the customer experience. The government hopes this change will foster more transparent, predictable pricing at checkout, which could benefit both businesses and consumers in the long term. However, businesses will need to assess whether the removal of these surcharges will lead to hidden costs elsewhere, such as higher banking fees or other service charges. The Reserve Bank’s consultation will be crucial in determining how these changes will be implemented to ensure fair outcomes for all parties involved.

So, what are the pros and cons of this proposed surcharge ban?

  1. Benefits of a ban on debit card surcharges:
  • Improved customer experience – A ban on surcharges may lead to a more positive customer experience, with your customers no longer being surprised by additional costs at the checkout. This could lead to a more transparent buying experience.
  • Simplified pricing – Without surcharges, you can present a simpler, more open pricing structure to your customers. If the price is $10, that’s what the customer pays. This reduces confusion and means that customers pay the price they were expecting.
  • Reduced administrative costs for you – With the debit surcharge removed, you no longer need to add that percentage charge to the customer, and pay it to your bank or service provider. In short, the expense of taking card payments will disappear.
  1. Potential negatives of a ban on debit card surcharges:

Those plus points all sound highly engaging, and could help to simplify the buying process for both you, your staff and your customers. But there is a potential downside:

Who will absorb the administrative costs?

The Government’s plan is for both consumers and businesses to have that extra surcharge cost removed. But there is likely to still be an administrative cost to the bank and EFTPOS provider. This cost could be passed on to the business user in the form of other inflated bank charges.

So, will the surcharge cost simply be pushed back to the business owner? Or will the Government put measures in place to stop this? Treasurer, Jim Chalmers is quoted as saying:

“Consumers shouldn’t be punished for using cards or digital payments, and at the same time, small businesses shouldn’t have to pay hefty fees just to get paid themselves.

We’re prepared to ban debit card surcharges, subject to further work by the Reserve Bank and safeguards to ensure small businesses and consumers can both benefit from lower costs.”

Further feedback from the RBA consultation and comment from the business community will be needed before this surcharge ban becomes effective in 2026.

Talk to us about the impact of a debit surcharge ban

If you’re currently paying surcharges on customer debit payments and want to understand the impact of the proposed debit surcharge ban, reach out to us today. We can help you assess the potential benefits of eliminating surcharge costs and what this could mean for your operating expenses, margins, and profitability. You can email us at [email protected], call us at 1300 844 678, or submit a form online through our website. We’re here to support your business through these changes and beyond.