Why the RBA decided to ban card surcharges<\/h2>\n
The main reason the RBA banned surcharge fees on card transactions is that most transactions in Australia use a debit or credit card (73%)<\/a>. Because card transactions carry built-in fees charged by card providers and networks, customers and businesses are forced to absorb these costs unfairly.<\/p>\n This is why the RBA has stepped in. Without other viable payment options to counter the prevalence of card payments, consumers can\u2019t avoid these card transaction fees.<\/p>\n Thanks to the RBA surcharge ban, businesses may enjoy lower interchange fees, but may also have to change how they charge card payments.<\/p>\n Interchange fees will drop from 0.8% to 0.3% for domestic consumer credit cards, while domestic prepaid and debit cards will be capped at 0.16% or 8 cents, whichever is lower.<\/p>\n However, interchange fees are only part of the merchant service fee (MSF) that businesses pay. MSFs include the interchange fee along with scheme fees and the provider’s margin.<\/p>\n While this should translate into lower MSFs, it isn\u2019t guaranteed, though some providers, like CommBank, have lowered their fees. This leaves businesses to decide whether to absorb the cost and how much.<\/p>\n Incorporating transaction fees into your sale price isn\u2019t exactly straightforward. For instance, a broad price increase doesn\u2019t account for:<\/p>\n Let\u2019s say a business pays $4,800 in merchant fees on $400,000 annual turnover, which is 1.2% of revenue. Simply increasing prices by 1.2% doesn\u2019t cover the cost, as the merchant service fee is calculated on the final transaction value. As prices increase, so too do merchant service fees.<\/strong><\/p>\n So, in practice, some cost absorption for businesses is inevitable \u2014 it\u2019s just a matter of deciding how much. Businesses should also consider what a 1.2% price increase will look like on signage, i.e. $5.00 into $5.06 for a coffee.<\/p>\n The surcharge ban requires businesses to adjust prices and processes, but it also presents an opportunity to compare card payment providers.<\/p>\n Before deciding whether to absorb costs or adjust prices, compare your options. Part of the RBA\u2019s reasoning for the ban is to give businesses a chance to shop around and find a better deal on card payment providers<\/a>.<\/p>\n Most POS and payment providers will likely update themselves to accommodate the surcharge ban, but check and update manually if needed. Do this across payment terminals, and also check your integrated accounting software<\/a>, since you\u2019ll likely need to update costs and expenses there.<\/p>\n Remove all signage regarding surcharges for card transactions. For example, many cafes and restaurants will have this signage on menus or on the physical EFTPOS machine. If you’re passing costs on, update sale prices and include clear reasons why, if appropriate.<\/p>\n While the surcharge ban offers simpler pricing for customers, it doesn\u2019t remove fees entirely. Instead, it hides them and creates a challenge for small businesses that depend on card payment providers.<\/p>\n Ultimately, small businesses will have to decide how much to absorb and how to adjust pricing strategies. But there is an opportunity to reduce costs, too, since capped and lowered interchange fees may affect card payment system costs. Businesses should review provider offerings and switch to what best fits their operations so they\u2019re ready when the ban takes effect on 1 October 2026.<\/p>\n [\/et_pb_text][ba_social_share icon_bg=”#03002e” icon_padding=”10px|12px|10px|12px|true|true” layout=”classic” show_text=”off” btn_padding=”0px|0px|0px|0px|false|false” btn_bg_color=”RGBA(255,255,255,0)” _builder_version=”4.23″ _module_preset=”default” custom_margin=”50px||||false|false” custom_padding=”25px||||false|false” custom_css_before=” content: %22SHARE THIS%22;|| font-size: 16px;|| font-weight: 700;|| line-height: 22px;|| letter-spacing: 0em;|| text-align: center;|| color: #ff5447;|| margin-bottom: 10px;|| display: inline-flex;|| position: absolute;|| margin-top: 10px;” border_width_top_main=”1px” border_color_top_main=”#e4e4e4″ border_radii_icon=”on|5px|5px|5px|5px” global_colors_info=”{}” custom_css_before_last_edited=”off|desktop”][ba_social_share_child _builder_version=”4.23″ _module_preset=”default” global_colors_info=”{}”][\/ba_social_share_child][ba_social_share_child network_type=”facebook” _builder_version=”4.23″ _module_preset=”default” global_colors_info=”{}”][\/ba_social_share_child][ba_social_share_child network_type=”linkedin” _builder_version=”4.23″ _module_preset=”default” global_colors_info=”{}”][\/ba_social_share_child][ba_social_share_child network_type=”email” _builder_version=”4.23″ _module_preset=”default” global_colors_info=”{}”][\/ba_social_share_child][\/ba_social_share][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" From 1 October 2026, card surcharges disappear, but merchant fees remain. Here’s what the RBA ban means for small businesses.<\/p>\n","protected":false},"author":36,"featured_media":308675,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":" Is your small business a great place to work? Reckon is! For 2024-2025, Great Place To Work has stamped its seal of approval and determined that Reckon is an industry leader in nurturing our employees and providing a safe workplace.<\/span><\/p> So, who is Great Place To Work, and how did Reckon measure up?<\/span><\/p> Great Place To Work<\/span><\/a> is an industry body that consults on workplace management and provides certifications for businesses of all sizes on their capacity to offer a great working environment.<\/span><\/p> Great Place To Work has reviewed the workplace culture and practices of many Australian businesses and developed a model that determines what is average, to good or great place to work. They don't share this model, but they hint at a few key indicators that are considered, such as leadership, experience, culture, and performance.\u00a0<\/span><\/p> How the workplace thrives at Reckon starts with our Head of People & Culture, Jessica Morris. Here is what she had to say about our certification:<\/span><\/p> I\u2019m absolutely thrilled to share that we\u2019ve been officially certified as a Great Place to Work! This recognition is a testament to the incredible culture we have here at Reckon. The team's dedication, authenticity, and camaraderie have been the driving force behind our success, and we can all be proud of it.\u00a0<\/span><\/em><\/p> Reckon isn\u2019t your typical software company. We are smaller, close-knit, and share the same values you won\u2019t find in a bigger organisation. Everyone is encouraged to be themselves and given the opportunity to find success in their roles. It\u2019s a real privilege to work here.\u00a0<\/span><\/em><\/p> I\u2019d like to give a big thank you to each of our employees for making our company a fantastic place. Together, we\u2019ll continue to build an environment where everyone has the opportunity to thrive and grow.<\/span><\/em><\/p> So, how does Reckon stack up against the rest?\u00a0<\/span><\/p> So, what is the industry standard for a good workplace? Several factors contribute to a great workplace, but ultimately, it comes down to a shared company culture and values that management and employees agree on. Through Great Place To Work\u2019s modelling, <\/span>Reckon differentiates itself from the typical Aussie company<\/span><\/a>.<\/span><\/p> Although Great Place To Work doesn\u2019t provide access to their modelling, it shows where you scored best.<\/span><\/p> Our highest score was in justice, at <\/span>96%<\/strong>. Justice is the extent to which employees perceive management promotes inclusive behaviour and ensures fairness.<\/span><\/p>What does this change mean for businesses?<\/h2>\n
Why recovering the cost isn’t as simple as raising prices<\/h3>\n
\n
What businesses should do before the surcharge ban starts<\/h2>\n
Compare card payment providers<\/h3>\n
Update POS and payment systems<\/h3>\n
Communicate changes to customers<\/h3>\n
The RBA surcharge ban in a nutshell<\/h2>\n
About Great Place to Work<\/b><\/h2>
How to make a good company culture<\/b><\/h2>
![\"\"](\"https:\/\/www.reckon.com\/au\/wp-content\/uploads\/2024\/09\/Untitled-600-x-200-px-1-300x105.png\")
<\/p>How Reckon scored<\/b><\/h2>
![\"\"](\"https:\/\/www.reckon.com\/reckon-blog\/wp-content\/uploads\/2024\/09\/Graph-300x200.png\")
<\/p>Justice\u00a0<\/b><\/h3>
Leadership behaviour<\/b><\/h3>