Banning card surcharging without guaranteed lower fees risks higher costs for small business and consumers

COSBOA welcomes lower fees and transparency – but says changes must flow through before surcharging is removed

The Council of Small Business Organisations Australia (COSBOA) has responded to the Reserve Bank of Australia’s decision today to remove card surcharging from 1 October 2026, alongside measures to reduce payment costs and improve transparency.

COSBOA Chair, Matthew Addison said removing surcharging without first ensuring lower costs are delivered to small businesses risks shifting more pressure onto already tight margins.

“If you ban surcharging without guaranteeing lower fees, small businesses have no choice but to absorb the cost and that will ultimately be reflected in prices.”

COSBOA said small businesses do not control how customers choose to pay, but they do carry the cost of those payment methods.

“Surcharging has been one of the only ways small businesses can recover these costs.

“If you remove that without fixing the underlying fees, you’re asking small businesses to wear them.”

COSBOA welcomed the Reserve Bank’s focus on reducing payment costs, but said the key issue is whether those savings are passed through in full.

“Lower fees are only meaningful if small businesses actually see the benefit in what they’re charged.

“Without clear pass-through, this reform doesn’t deliver real relief.”

COSBOA also supported stronger transparency measures, saying they are critical to helping small businesses understand and manage their payment costs.

“Greater transparency is a positive step, but small businesses need time to see what their new costs are, understand them, and have the opportunity to shop around.”

COSBOA said removing surcharging before this happens risks getting the sequence wrong.

“Banning surcharges before businesses can see lower fees and understand their costs is putting the cart before the horse.”

To ensure the reforms work for small business, COSBOA said the package must deliver:

• Real reductions in payment costs that are passed through to small businesses

• Clear and accessible pricing so businesses can compare providers

• Wider availability of least-cost routing to keep payment costs down

“In a system without surcharging, transparency and least-cost routing become essential to keeping costs under control.”

Mr Addison said implementation timing will be critical.

“Small businesses will need time to see the impact of these changes, adjust their pricing, and update systems.

“Without a practical transition, they risk being hit with the cost before the benefits arrive.”

COSBOA is calling for the implementation timeline to allow small businesses time to realise lower costs, access clear pricing information, and make informed decisions before surcharging is removed.

-ENDS-

Notes to Editors:

Media contacts:

• Debbie Bradley, Group Account Director, Zadro | debbie@zadroagency.com.au | +61 420 761 189.

• Marlise Beasley, General Manager & Account Director, Zadro | marlise@zadroagency.com.au | +61 423 624 013

About COSBOA

Founded in 1977, and incorporated in 1979, the Council of Small Business Organisations Australia (COSBOA) is a member based not-for-profit organisation exclusively representing the interests of small businesses. The capability, representation, and reach of COSBOA are defined by a mix of over 50 national and state-based members. COSBOA's strength is its capacity to harness its members' views and advance consensus across policy areas common to many.

Our member organisations work with the COSBOA team to assist us with policy development and guide our advocacy - not just for small businesses but also for the benefit of the Australians they employ. In this capacity, COSBOA makes submissions and representations to the government, including its agencies, on issues affecting small businesses and to pursue good policy.

www.cosboa.org.au