Surcharging is one of the most talked-about topics in Australian payments right now. More businesses are doing it. Customers have opinions about it. And the rules are evolving. If you accept card payments — and nearly every business does — you need to understand how surcharging works, what the limits are, and where things are heading.
What Is Surcharging?
Surcharging is when a business adds a small fee to a transaction to cover the cost of accepting a card payment. Instead of the business absorbing the processing fee charged by their eftpos provider, that cost is passed on to the customer.
For example, if your provider charges you 1.2% to process a Visa transaction, you can add a surcharge of up to 1.2% to the customer's bill. On a $100 purchase, that's $1.20 extra.
Surcharging is completely legal in Australia and is regulated by the Reserve Bank of Australia (RBA). But there are rules — and getting them wrong can land you in trouble.
The Rules: What You Can and Can't Do
You can surcharge — but only up to cost
The most important rule is this: your surcharge cannot exceed the reasonable cost of accepting that payment method. This is the RBA's core principle, and it's enforced by the ACCC.
That means you can't charge a flat 2% surcharge if your actual processing cost is 1%. The surcharge must reflect what you're genuinely paying to accept the card.
Different cards, different costs
It costs different amounts to process different card types. Eftpos debit is typically the cheapest. Visa and Mastercard debit are slightly more. Credit cards cost more again. And premium or corporate cards are often the most expensive.
You're allowed to set different surcharge rates for different card types. Many businesses choose a single blended rate for simplicity, but it must still reflect the weighted average cost of accepting those cards.
You must disclose the surcharge
Customers must be informed of the surcharge before they pay. This means clear signage at the point of sale, and the surcharge should appear as a separate line item on the receipt. Surprising a customer with a surcharge after they've tapped their card is a compliance issue — and a customer experience disaster.
You can't surcharge cash or non-card payments
Surcharging only applies to card-based payments. You can't add a surcharge for cash, direct debit, or bank transfers.
What's Changing in 2026 and Beyond
The payments landscape is shifting. The RBA has been conducting reviews into the payments system, and surcharging is firmly on the agenda. Here's what business owners should be aware of:
Increased enforcement
The ACCC has been stepping up enforcement of excessive surcharging. Businesses that charge more than their actual cost of acceptance are being investigated and penalised. This isn't just for large corporations — small businesses are on the radar too.
The push toward least-cost routing
Least-cost routing (LCR) allows contactless debit transactions to be processed through the cheapest available network — typically the eftpos network rather than Visa or Mastercard. This reduces your processing cost, which in turn reduces the maximum surcharge you can apply. More providers are now supporting LCR, and it's something we check as part of every provider comparison.
Consumer awareness is growing
Customers are more aware of surcharges than ever. Most accept them as part of doing business, but excessive or poorly communicated surcharges generate complaints and negative reviews. Getting the rate right and communicating it clearly protects both your compliance and your reputation.
Should Your Business Surcharge?
This depends on your business type, your customers, and your margins. Here's a quick framework:
Surcharging makes sense when:
- Your margins are tight and absorbing processing fees significantly impacts profitability
- Your competitors surcharge — if it's standard in your industry, customers won't think twice
- You process high volume and the fee savings are substantial (a café processing $80,000/month saves thousands annually)
- You want simplicity — free eftpos models use surcharging to eliminate your fees entirely
Surcharging may not suit you when:
- You're in premium hospitality or luxury retail where customer experience is paramount
- Your average transaction value is very high — a 1.5% surcharge on a $5,000 purchase is $75, which customers will notice
- Your competitors don't surcharge — you could lose business if you're the only one adding fees
There's no one-size-fits-all answer. We regularly help businesses model both scenarios — surcharging versus absorbing fees — so they can see the actual dollar impact on their specific situation.
How to Set Up Surcharging Properly
If you decide to surcharge, here's how to do it right:
- Know your actual cost of acceptance. Your provider can give you a breakdown of your processing costs by card type. This is the ceiling for your surcharge.
- Choose your surcharge model. You can set a single blended rate or different rates per card type. Blended is simpler; per-card-type is more precise.
- Configure your terminal. Most modern terminals can be set to apply surcharges automatically. Your provider should help you configure this.
- Put up signage. A clear notice at the counter or entrance that says something like "A surcharge of X% applies to card payments" is the minimum. Many businesses also include it on menus or price lists.
- Review regularly. Your processing costs change over time — especially if you switch providers, negotiate better rates, or enable least-cost routing. Review your surcharge rate at least annually to ensure compliance.
What If You're Being Overcharged?
Here's something many business owners don't realise: if your provider is charging you more than necessary, your surcharge rate has to be higher too — which means your customers pay more, and your business looks less competitive.
Reducing your processing costs through better rates or a different provider directly benefits your surcharging position. Lower costs mean a lower surcharge, which means happier customers and fewer complaints.
This is exactly what we do at Eftpos Brokers. We compare over 20 providers to find the best rates for your business, which can also improve your surcharging position. Combined with same-day settlement and perks like Qantas Points, there's often a significantly better deal available than what you're currently on.
Book your free consultation here or call us free on 1800 595 340.