Millions of Australian businesses cop cost of misguided surcharge ban

Millions of Australian businesses cop cost of misguided surcharge ban and Federal Government hypocrisy, as rates and inflation climb

Thursday, 1 October 2026

Millions of small businesses are being hit again today by the misguided decision to ban surcharges on credit and debit card transactions, which takes effect today.

The Australian Chamber of Commerce and Industry (ACCI), Australia's largest and most representative business network, has warned about this change for years and opposed its implementation.

ACCI Chief Executive Officer Andrew McKellar said the ban comes at precisely the moment many operators are already struggling with rising costs and intensifying economic pressure.

"This surcharge ban will not save Australians from the cost of transaction; it is just pushing up prices and hurting small business."

ACCI is also deeply disappointed to see that the Australian Taxation Office has decided to wait until today to make public that it will no longer accept credit card payments as a result of the surcharge ban.

"It is utter hypocrisy that the ATO, a government agency, refuses to absorb the costs of extending payment options to credit cards, yet expects small businesses across the country to absorb them because of a ban the government is implementing today," Mr McKellar said.

"When decisions like this are deliberately hidden until the last moment, it is little wonder so many small businesses are angry at the government."

"Surcharging was never a revenue tool for small businesses, it was just a way to transparently recover merchant service fees. This ban is causing dread across small businesses who are bracing for increased costs at the terminal, reprinting menus and putting up prices today."

"Small businesses did not surcharge because they wanted to. They surcharged because the payment system has a cost for every transaction," Mr McKellar said.

This latest hit on small business comes as interest rates and inflation are rising is Australia. The Reserve Bank of Australia raised the cash rate to 4.60 per cent, the fourth increase this year and the highest level in almost 15 years. The Australian Bureau of Statistics also confirmed that annual inflation rose to 4.0 per cent in the 12 months to August, up from 3.5 per cent in July.

"Small businesses are now having to absorb the cost of transactions at the very time interest rates are going up, and home-grown inflation continues to push up prices. Australian businesses are being strangled by these compounding hits."

ACCI has consistently opposed a blanket approach that treats surcharging as the problem instead of tackling the real issue: high and opaque merchant card payment costs that businesses must pay to banks and other payment providers.

ACCI's 2024 submission on the change highlighted that in hospitality, for example, more than three-quarters of businesses apply a surcharge. All surveyed businesses applied a rate under 2 per cent purely to cover merchant service fees, and none applied surcharges for profit. This reflects broader practice across the small business community, which represents more than 97 per cent of all Australian businesses.