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The Surcharge Ban Is Coming. What Replaces the Revenue?

The RBA's card surcharge ban takes effect 1 October 2026. Payment companies that relied on surcharge pass-through need a new revenue model. Here is what is changing and what comes next.

Effective 1 October 2026

$660M interchange reduction

Surcharge model ends

The surcharge model is dead

On 1 October 2026, the RBA's amendment to Standards No. 1, 2, and 3 of 2016 under the Payment Systems (Regulation) Act takes effect. Card networks (Mastercard, Visa, and eftpos) will be permitted to reinstate their no-surcharge rules.

In plain terms: merchants can no longer pass card transaction costs to consumers as a surcharge. For many payment companies, this is not a minor adjustment. It is the end of a business model.

Who gets hurt

The "free terminal, surcharge covers it" model drove adoption for a generation of Australian fintechs and payment providers. The merchant paid nothing upfront. The consumer absorbed the cost at the point of sale. That era is ending.

Surcharge revenue disappears

Merchants cannot charge consumers a card surcharge on eftpos, Mastercard, or Visa transactions from October 2026. The revenue line that subsidised free terminals, onboarding, and support vanishes overnight.

Interchange income shrinks

The RBA is simultaneously cutting interchange caps. Domestic consumer credit card interchange drops from 0.8% to 0.3%. That is a $660 million annual reduction across the industry.

The squeeze is real

Tyro's share price dropped 15% in a single session when the proposal was first announced in July 2025. Fintech Australia's submission to the RBA explicitly warned that smaller acquirers and challenger fintechs are most exposed. They lack the cross-subsidy from banking products that major banks use to absorb acquiring losses.

The merchant retention problem

Here is the part most payment companies are not talking about publicly: when the surcharge model dies, merchant loyalty dies with it.

A merchant who chose you because "the terminal is free and the surcharge covers it" has no reason to stay when every provider now charges a merchant service fee. Price becomes the only differentiator. And in a price war, the biggest players always win.

The question is not just "how do we replace the revenue?" It is "how do we give merchants a reason to stay?"

What merchants actually need

While payment companies are reworking their pricing models, Australian businesses are facing a separate crisis: payment fraud is growing faster than any other category of financial crime.

$2.03 billion lost to payment scams in 2024. $152.6 million in payment redirection fraud alone. A 66% year-on-year increase. And 96% of losses are irrecoverable.

Every business that makes payments is exposed. Business email compromise. Fake invoices. Payment redirection. Payroll fraud. These are not hypothetical risks. They are happening to Australian businesses every week.

Most merchants have no systematic protection. They verify payment details manually (phone calls, emails, hoping) or they do not verify at all.

OPPORTUNITY

A new value exchange

The merchants on your platform already trust you with their payment infrastructure. You process their transactions. You settle their funds. You are embedded in their daily operations. That relationship is worth more than a surcharge margin.

See How It Works

Key Dates

Standards finalised Now

Surcharge ban 1 Oct 2026

Foreign interchange cap 1 Apr 2027

Fee transparency Staged 2027

Retention, not just revenue

Payment companies that bundle fraud prevention and payment verification into their merchant offering create something a price war cannot erode: a reason to stay. A merchant paying a monthly fee for payment protection they cannot get elsewhere is a merchant who does not churn when a competitor undercuts your rate by 0.1%.

Different economics

Instead of extracting margin from transaction volume (a model the RBA just killed), you deliver a service that merchants value independently of the payment rail. Fraud prevention is not a cost of doing business. It is the cost of not doing business safely.

Regulatory-proof value

A value proposition that does not depend on regulatory permission. The Scams Prevention Framework and AML/CTF reforms are increasing the demand for verification, not decreasing it.

The timeline

The clock is running. Payment companies that wait until October to find their next revenue model will be competing on price alone, against players with deeper pockets.

Now

The amended standards are finalised. Card networks are preparing to reinstate no-surcharge rules.

1 October 2026

Surcharge ban takes effect on eftpos, Mastercard, and Visa (debit, prepaid, and credit).

1 April 2027

Foreign-issued card interchange cap drops from 2.4% to 1%.

Staged through 2027

Enhanced fee transparency reporting for large acquirers (over $10B volume).

Frequently asked questions

When does the RBA surcharge ban take effect?

The surcharge ban takes effect on 1 October 2026. From that date, card networks (Mastercard, Visa, and eftpos) can reinstate their no-surcharge rules, meaning merchants can no longer pass card transaction costs to consumers as a surcharge.

Which payment companies are most affected by the surcharge ban?

Payment companies that built their pricing around the "free terminal, surcharge covers it" model are most exposed. Smaller acquirers and challenger fintechs lack the cross-subsidy from banking products that major banks use to absorb acquiring losses. Fintech Australia explicitly flagged this risk in their submission to the RBA.

How does the surcharge ban affect interchange income?

The RBA is simultaneously cutting interchange caps. Domestic consumer credit card interchange drops from 0.8% to 0.3%, representing a $660 million annual reduction across the industry. Combined with the loss of surcharge revenue, payment companies face a double hit to their margins.

How can payment companies replace lost surcharge revenue?

Payment companies that bundle fraud prevention and payment verification into their merchant offering create a value proposition that survives the surcharge ban. Instead of extracting margin from transaction volume, they deliver a service merchants value independently of the payment rail. Fraud prevention becomes a reason for merchants to stay, not just a cost.

What does this have to do with payment fraud?

Australian businesses lost $2.03 billion to payment scams in 2024. Every merchant on a payment platform is exposed to business email compromise, fake invoices, and payment redirection fraud. Payment companies that bundle verification into their offering solve a real problem for merchants while building a revenue stream the RBA cannot regulate away.

Stop payment fraud before money moves

See how Australian businesses are verifying payments in real time. Bundle fraud prevention into your merchant offering and build a revenue stream the RBA cannot regulate away.

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