Posted: October 14, 2026
For years, Australian customers have paid extra fees when they use a credit or debit card to make purchases. Businesses added card surcharges to offset the costs of accepting card payments. However, those additional charges are about to disappear.
As of October 1, 2026, businesses in Australia can no longer add extra fees to transactions done with Visa, Mastercard, EFTPOS, or American Express cards under new card network rules, after the RBA permitted the networks to ban the surcharges.
Could the United States also introduce a nationwide ban on card surcharges? This change raises an important question for US businesses.
Card processing costs are an inevitable burden for retailers, restaurants, service providers, and online shops. Some add a surcharge to the selling price to cover the costs, while others include them in the price. Banning surcharges might make the final cost clearer for customers, but businesses should find another way to cover card-payment-related expenses.
In the United States, credit card surcharging is legal in most states, but businesses must follow state laws and the card networks’ terms. However, fluctuations in interchange fees, state-specific restrictions, and legal disputes may impact credit card surcharging practices in the future.
Here is what Australia changed, how US rules differ, and what merchants should watch next.
Australia’s surcharge ban comes into effect on October 1, 2026. Under the new rules, businesses can no longer charge customers an additional fee for using covered credit, debit, or prepaid cards to make payments.
The ban includes Visa, Mastercard, and EFTPOS. American Express, PayPal, and UnionPay have also announced policy changes to eliminate surcharges for card users. Businesses need to examine the rules for each payment method they accept.
The Reserve Bank of Australia (RBA) reviewed the surcharge system to address concerns that it was ineffective at encouraging customers to use cheaper payment methods and was confusing for businesses and consumers. The RBA decided to change the surcharge policy because some customers had no alternatives.
For example, a restaurant that charges 1.5% extra when customers pay by card can no longer apply the surcharge. But it can adjust its menu prices to offset the surcharge, as long as it complies with consumer law.
The Australian government, along with the RBA, has taken measures to increase price transparency for customers and has urged organizations to seek more affordable alternative payment methods.
Under the updated rules, businesses may not surcharge purchases paid through the covered card networks. However, merchants can include payment processing fees in the cost of goods and services.
The new rules do not prohibit all additional charges. Businesses may impose weekend, public holiday, and booking fees, as long as they comply with applicable laws.
Businesses may not rename a card surcharge to avoid the new restrictions. Merchants must follow the new rules and refrain from imposing any additional charges on customers who pay with cards.
The surcharge ban is part of a wider payment reform package. Australia is also cutting interchange fee limits for certain domestic card transactions. Starting October 1, 2026, the capped domestic interchange fees dropped to 0.3% of the transaction value. Meanwhile, the capped domestic debit and prepaid card interchange fees are now 8 cents per transaction and 0.16% of transaction value.
These caps apply only to certain fees, not all the charges businesses pay when people use cards to buy their products and services. Further fee adjustments will also take effect on April 1, 2027, including a proposed cap on charges for processing foreign-issued cards in Australia.
The RBA also aims to improve fee transparency so businesses can compare payment providers. This should help reduce payment costs and make pricing more transparent to consumers.
The United States has not introduced a nationwide ban on card surcharges, unlike Australia. US businesses are generally allowed to impose surcharges on customers for using a particular credit card, although they should comply with state-specific rules and card network regulations. Because policies vary by state, a surcharge legal in one state may be prohibited in another.
Visa and Mastercard also have their own requirements. These relate to advance notice, customer disclosures, receipts, the types of cards that can be surcharged, and the maximum amount a merchant may charge.
Under Visa and Mastercard policies, US companies may not add surcharges to debit and prepaid cards. This rule also applies if the customer chooses the credit option on the payment terminal because it is technically a debit card; selecting this option does not make it eligible for a surcharge. Before adding a surcharge, companies must verify the card type and ensure the transaction does not violate card network rules or state laws.
Visa limits credit card surcharges in the US to the lesser of what the merchant pays for the card or 3%. Mastercard’s surcharge limit is 4%, but it also depends on the cost at which the merchant acquires the Mastercard credit card.
Moreover, state laws and regulations may also cap such fees. Thus, businesses cannot unilaterally decide to surcharge customers’ cards by 3% or 4% because the amount depends on the credit card network’s rules, payment processing costs, and state laws, among other factors.
Some U.S. states prohibit or restrict credit card surcharges, while others allow them under certain conditions.
Businesses operating in several states should understand the rules in each state and for each channel. Sales are generally subject to the law of the state where the transaction takes place, so online sellers should research the rules in their customers’ states as well as their own.
Even where surcharges are permitted, businesses are often required to provide notices and disclosures to payment processors/card networks and/or customers when a payment method surcharge is applied.
The business should check with its payment processor and card network to assess whether they should be notified of the intention to apply surcharges. The business must provide disclosure to the customer before payment transaction completion.
Could the US eventually go the same way as Australia? The US surcharge rules could change, but Australia acting doesn’t mean the US will follow. A few things could move the issue.
One significant issue to discuss is the long-running legal battle between merchants and Visa and Mastercard over credit card processing fees.
In 2026, the court approved a preliminary settlement that proposed adjustments to interchange fees and several other provisions on card acceptance and retailers’ freedom to surcharge credit cards.
Supporters of the proposed settlement claim it will benefit businesses by saving them money and offering flexibility. However, the merchants say the reimbursement is too small, and the deal does not fully address the issues.
The agreement will be subject to final court approval, and merchants should not act as if the proposed changes have already taken effect.
The settlement may affect how US merchants can impose surcharges, but it is not necessarily a complete ban on surcharging. In fact, the settlement proposed two additional surcharging options.
Another pressure point is state laws.
If more states ban surcharging, the environment for businesses may get even more complicated. Depending on the state they operate in, a merchant may have to offer different payment terms.
The state-by-state approach does not necessarily mean the whole country will endorse a ban. Some states may legalize surcharging, while others prohibit it. Therefore, merchants’ most pressing concern is the legal status of their specific business, not a single norm applied to all transactions.
The 3% limit is a frequent topic of debate because Visa’s US regulations allow a 3% or less credit card surcharge, based on the merchant’s cost of accepting cards.
Many believe surcharges help offset processing fees without raising prices for all customers, but others argue consumers should see the final price before purchasing.
The discussion also focuses on how much businesses actually pay in card acceptance fees. Under card network rules, a surcharge cannot exceed the merchant’s cost of acceptance, so it cannot become a profit center.
Australia’s recent card surcharge ban is a significant step toward regulating the cost of card payments for businesses. Starting October 1, 2026, businesses cannot add surcharges to card payments on networks covered by the regulation. The changes also include lower interchange-fee limits and clearer disclosure of payment costs.
The US has no comparable regulation at the country level. Businesses can add surcharges to eligible credit cards in most states but should consider the state’s laws and the card network’s rules. Note that while the 3% surcharge cap is a notable example, it does not apply to all cards and situations.
Could the US learn from Australia’s example? The future may look different as legislators, regulators, business groups, and card networks continue weighing the costs of payment processing. But for now, no national ban on card surcharges exists. For now, merchants should go over their surcharge policies, understand their processing costs, and stay on top of confirmed rule changes.
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Yes, in most cases, merchants can apply fees on eligible credit card transactions subject to state laws and card network rules.
Australia aimed to make prices clearer for customers, reduce checkout surprises, and address concerns about card payment costs.
Yes, card networks could change their rules, but any changes would depend on their policies and applicable laws.
