The card surcharge ban has arrived. How much more can a small business absorb?
The card surcharge ban can squeeze a small business that is already stretched, so the first job is to work out what it actually costs you before changing prices or borrowing.
You have already put your prices up once. Customers noticed. The electricity bill has not become smaller, your staff still need paying, and another supplier has emailed a revised price list.
Now the small amount you used to recover when someone paid by card has to come from somewhere else.
For an Australian café, salon, repair shop or neighbourhood retailer, that can feel like one more decision with no comfortable answer. Absorb it and the owner takes the hit. Increase prices and risk another conversation at the counter. Borrow and add repayments to an already tight week.
There is a more useful place to start: your actual figures.
What does the card surcharge ban mean for your business?
As at 24 October 2026, the new arrangements are already operating. The Reserve Bank’s explanation of the changes sets out how its regulatory changes allowed designated card networks to introduce no-surcharge rules from 1 October 2026. Check the rules applying to the cards you accept and your payment service agreement rather than assuming every payment method has identical conditions.
Removing the surcharge does not remove the cost of accepting the payment. Your business still needs to account for the charges it actually pays.
The practical questions are straightforward:
How much surcharge income did you actually receive before the change?
What are your current processing and terminal costs?
How much can the business absorb without cutting into money needed for its bills?
What price or operating changes could close the gap?
Check that your terminal, online checkout and invoices reflect the applicable rules. A familiar setting that has been left switched on can become a problem even when nobody intended to do anything wrong.
Start with the statement, not the headline
Pull out recent merchant statements and compare them with your sales records. Separate the surcharge collected from the amount charged by your provider. They may not have matched, especially where different cards, fixed charges or transaction sizes were involved.
Then compare the position before and after the change on similar trading volumes. A busy school-holiday week and a quiet ordinary week will not tell you much about the surcharge effect on their own.
The RBA reforms also include changes to interchange fee caps, but that does not tell you exactly what your individual provider will charge. Ask for a written explanation of your current pricing, available plans and any changes to your agreement. Base the decision on a quote for your business rather than an assumed saving.
This is the same discipline used when working out how much working capital a business needs: identify the amount, the timing and what is already committed before deciding how to respond.
A small percentage can take a bigger bite out of what you keep
Consider a hypothetical shop, using simplified figures that exclude GST and other tax effects. It makes $80,000 in monthly product sales and, including surcharge income and after its existing costs, has $4,000 left before owner remuneration and tax.
Suppose it previously collected $800 in surcharges each month. If that income disappears while everything else stays the same, the amount left falls to $3,200. In this example, losing an amount equal to 1% of sales reduces the remaining $4,000 by 20%.
These are illustrative assumptions, not an industry benchmark or a forecast for your business.
The point is that an apparently small sales percentage can matter when there was not much room left in the first place. If you only watch turnover, you might miss the problem until the next large bill arrives. The explanation of why a profitable business can still run short of cash helps separate what the accounts show from what is available to spend.
Raising prices is a decision, not a confession
It is understandable to worry about the customer who already says everything is too expensive. That does not mean the owner must quietly fund every increase in business costs.
Review your prices item by item where practical. Which products still make a reasonable contribution? Which attract customers but leave very little after buying, preparing or supplying them? Would a small adjustment to a popular service work better than a blanket increase across everything?
The ACCC’s guidance on card surcharges and pricing explains that businesses can incorporate payment costs into their overall prices, while keeping price displays and explanations accurate. Do not relabel a prohibited card surcharge as an administration fee. Weekend and public holiday surcharges are a separate issue, not a replacement label for a card fee.
If a price rise reflects several costs, say so honestly. Update menus, shelf labels, booking pages and staff instructions together so customers do not discover a different price only when they pay.
Find savings that do not make the business harder to run
Start with costs you can change without damaging the service customers return for. Look at unused subscriptions, avoidable stock waste, poor purchasing habits and quiet periods where the roster does not match demand. Changes affecting employees need to comply with their employment arrangements.
Ask whether your payment setup still suits your average transaction size and sales mix. Include terminal rental, additional services and exit costs when comparing offers. A lower headline transaction rate may not produce the lowest total bill.
The guide to improving cash flow before borrowing can help turn those observations into actions. Choose a few changes you can measure rather than introducing ten new rules during an already stressful week.
Protect the parts of the business that generate worthwhile repeat sales. Saving a little on supplies is not useful if it creates rework, complaints or lost customers.
Put the change into the weeks ahead
Your annual budget might still look acceptable while next month’s rent and stock order collide. Put the revised receipts and charges into a weekly cash forecast, alongside wages, tax, rent and supplier payments.
The government’s cash flow statement guidance explains how forecasting receipts and payments helps identify shortages. Mark estimates clearly and use a consistent GST basis. For a practical way to organise the weeks, use a 13-week cash flow forecast.
Run two versions: one with your proposed changes and one with sales lower than you hope. If the second version immediately needs more debt, reconsider the plan before committing. Keep money needed for tax and other obligations visible rather than treating the full account balance as available.
Would extra finance actually help?
There can be a difference between a temporary gap while sensible changes take effect and a business that no longer earns enough from its normal sales.
Before considering finance, write down the amount required, what will repay it and when. Allow for the repayments themselves. Comparing a business loan, overdraft and line of credit is useful only after the underlying need is clear.
If each ordinary week now loses money, borrowed cash may simply postpone the next shortage. The discussion of when borrowing may not solve cash-flow problems is particularly relevant here. Ask your accountant to help test the trading position rather than assuming a bigger facility will fix it.
The aim is to keep a workable business operating while you make informed changes, with enough breathing room to see whether those changes are working.
Frequently asked questions
Can I simply keep charging the old fee?
Check the current rules and your payment agreement. Where a no-surcharge rule applies, leaving the old terminal setting in place does not make the fee acceptable. Ask your provider to help correct the setup.
Should I increase every price by the same percentage?
Not automatically. Review the amount you need to recover, the contribution from different products and how customers buy. A uniform increase may be simpler, but it can hide items that were already priced poorly.
Is borrowing sensible if the extra cost is permanent?
Only if the business can support the debt and there is a credible reason for the funding. Permanent costs generally need a sustainable response in pricing, costs or the business model. Borrowing without that response can leave the same shortage plus repayments.
Can I offer a discount for another payment method?
The RBA’s guidance confirms that businesses can still offer payment-method discounts. Check the proposed arrangement with your payment service provider and keep price displays clear. Compare the discount with any processing saving so the change does not quietly reduce what you keep.
Make the next decision from your figures
Measure the gap, choose a response and set a date to review the result. If revised prices and costs support normal trading, then assess whether there is a temporary cash gap to fund. If they do not, get advice on the trading problem before adding repayments.
Feeling the Pressure on Your Business Cash Flow?
Fairlane Finance can help you assess a cash-flow gap and whether funding fits the way your business trades.
General information only. This article does not constitute financial, credit, legal, tax, accounting, compliance or valuation advice. Finance is subject to lender approval, eligibility criteria, terms, fees and conditions. Consider obtaining independent professional advice for your circumstances before acting.
