From Surcharging to Low-Cost EFTPOS: What It Means for Your Business and Your Customers

A practical guide for Australian business owners navigating the new payments landscape

Review of Merchant Card Payment Costs and Surcharging – Conclusions Paper | Media Releases | RBA Reserve Bank Australia

The End of an Era: Australia’s Surcharging Shake-Up

Something big is happening in Australian payments — and if you’re still surcharging customers on EFTPOS transactions, now is the time to rethink your strategy.

The Reserve Bank of Australia (RBA) has confirmed a ban on card surcharges across EFTPOS, Mastercard, and Visa networks, with changes taking effect from 1 October 2026. The reforms are sweeping: the removal of surcharges is expected to save Australian consumers approximately $1.6 billion per year, and capping interchange fees is projected to save businesses around $900 million annually — with small businesses benefiting the most. In a parallel move, interchange fees are set to drop from 0.8% to 0.3%, fundamentally changing the economics of card acceptance in this country.

The RBA’s position is clear: surcharging no longer works as intended. With fewer Australians using cash and many businesses applying the same flat surcharge rate regardless of card type, the regime designed to steer consumers toward cheaper payment methods has lost its purpose. As RBA Governor Michele Bullock put it, “Surcharging no longer works as intended. Consumers and businesses find the rules complex and confusing, surcharges are often not well disclosed, and most consumers want surcharging to stop.”

For many business owners, this creates an urgent question: if you can no longer pass EFTPOS costs on to customers, how do you manage those costs — and what are your options?

Understanding the Shift: What “Low-Cost EFTPOS” Actually Means

Before exploring the transition, it’s worth clarifying what we mean when we talk about no-cost versus low-cost EFTPOS — because the distinction matters enormously for your bottom line.

No-Cost (Surcharging) EFTPOS is the model many Australian businesses have relied on for years. Under this arrangement, the merchant pays nothing — transaction fees, terminal rental, and processing costs are automatically added to the customer’s bill as a surcharge. It’s financially simple for the business, but it creates friction, frustration, and — as RBA data shows — 75% of surveyed Australian consumers find it unnecessary and want it to stop.

Low-Cost EFTPOS flips the model. The merchant absorbs a transparent, competitive processing fee — typically through blended rates (a flat percentage regardless of card type) or interchange-plus pricing (which tracks actual card costs). While the business pays a fee, that fee is genuinely low: the right provider can get it down to as little as 0.79% per transaction. And crucially, the customer experience improves dramatically — they see the price they expect to pay, with no unwelcome surprises at checkout.

The good news for businesses that have been surcharging: the same RBA reforms that remove your ability to surcharge are also reducing the underlying cost of accepting card payments. For 90% of Australian businesses, the RBA estimates they will come out ahead under the new arrangements.

What the Transition Looks Like in Practice

Switching from a surcharging model to low-cost EFTPOS is less complicated than many business owners fear — but it does require some planning.

Step 1: Audit your current payment costs. Before making any change, understand what you’re actually spending. Look at your monthly terminal rental, your transaction volumes by card type, and any fees from your current provider. Many businesses discover they’re paying far more than they need to once they start comparing.

Step 2: Reassess your pricing. If you’ve been surcharging, part of your revenue has come from customers paying that fee. With a low-cost EFTPOS model, you may need to make modest adjustments to base prices to account for the merchant fee you’re now absorbing. The RBA estimates that removing surcharges would cause consumer prices overall to increase by only 0.1 percentage point — a very small adjustment that most customers won’t notice on individual items.

Step 3: Choose the right provider. Not all low-cost EFTPOS solutions are created equal. Rates, contract terms, hardware costs, integration support, and settlement speed all vary significantly. This is where choosing a provider like Payee becomes critical.

Step 4: Switch your terminal and onboard quickly. With the right provider, this can happen in as little as 24–48 hours. Modern terminals arrive pre-configured, integrate with your existing point-of-sale system, and require minimal staff training.

Step 5: Update your customer communications. If you’ve been surcharging, your regular customers will notice the change — for the better. Consider a small sign at the counter or a note on receipts letting them know you’ve removed surcharges.

Why Payee Is the Smart Choice for This Transition

When it comes to making the switch, Payee is one of Australia’s most competitive and versatile EFTPOS providers — and they’ve been purpose-built for exactly this moment in the market.

Payee is 100% Australian owned and operated, PCI DSS compliant, and offers 24/7 local support. Critically, they give businesses genuine flexibility: you’re not locked into a one-size-fits-all product. Instead, Payee lets you choose the model that best fits your business right now — and change it as your needs evolve.

Three Core EFTPOS Solutions

No-Cost EFTPOS (Surcharging Model) For businesses not yet ready to move away from surcharging — or operating in industries where customer acceptance is high — Payee’s no-cost EFTPOS solution automatically passes transaction fees to the customer through dynamic, automated surcharging. There’s no terminal rental, no transaction fees to the merchant, and no setup or exit costs. Pass the surcharge to your customer — you pay absolutely nothing. And when you’re ready to make the move, Payee makes transitioning to low-cost EFTPOS simple and seamless, with competitive rates starting from just 0.79%, no lock-in contracts, and no exit fees — so you can switch on your own terms, at your own pace.

Low-Cost EFTPOS (Blended and Interchange Rates) This is Payee’s flagship offering for businesses making the transition. Transaction rates start from just 0.79% for established businesses and from 0.9% for newer ones — highly competitive by Australian market standards. Pricing is tailored to your business based on turnover, average transaction size, and your industry classification (MCC code), meaning you’re not paying a generic rate that wasn’t designed for your sector. There are no setup fees, no lock-in contracts, and no exit fees. Features include next-day settlement, automatic surcharging capability if needed, payment-by-link functionality, and a real-time merchant portal to track your takings and reports.

Online and Ecommerce Payments Payee extends the same competitive philosophy to ecommerce, with online payment rates starting from 1.4% — difficult to beat in the Australian market. Their PayeeSECURE gateway offers WooCommerce and Magento plugins for quick, seamless integration, along with payment links you can send via email or SMS, full API access for custom builds, and real-time fraud protection. For businesses that operate both a physical shopfront and an online store, Payee brings everything under one roof.

Hardware: In-Store, Mobile, and Integrated

Payee offers the full range of hardware configurations Australian businesses need.

In-Store EFTPOS covers both standalone terminals and integrated units that connect directly to your point-of-sale system. Payee integrates with over 450 POS systems, making it one of the most compatible providers in the market. Terminals accept every major payment type: Visa, Mastercard, EFTPOS, American Express, Apple Pay, Google Pay, Afterpay, Zip Pay, Alipay, WeChat Pay, and Union Pay.

Mobile EFTPOS is designed for businesses on the move — tradespeople, market stalls, food trucks, delivery services, and hospitality venues offering tableside payments. Terminals connect via 4G, Wi-Fi, or SIM card, and the transaction rates are transparent from the outset with no hidden charges.

Mix-and-Match Flexibility means you’re not forced to choose just one setup. If your business has a fixed counter and a mobile team, you can run a combination of terminals to suit each environment — and manage everything from a single merchant portal.

Buy Now, Pay Later Integration

Payee also configures your terminals to accept Zip Pay and Afterpay, which research shows can increase average transaction values by 30–40% by removing financial barriers at checkout. Payee handles the terminal configuration, provides staff training, and supplies marketing materials and signage to promote your BNPL options to customers.

How Payee Compares to the Competition

The Australian EFTPOS market has no shortage of providers, but when you compare Payee directly against major players, the difference becomes clear.

Square charges a flat 1.6% on all card transactions with no monthly fee and no contract — simple, but not cheap for higher-volume businesses. Zeller prices at 1.4% per transaction with a $299 upfront terminal cost. PayNuts offers surcharge-pass-through with no merchant fee, similar to Payee’s no-cost option, but with less flexibility in the low-cost space.

Payee’s blended rates from 0.79% represent a materially lower cost than Square or Zeller for established businesses. Add to that the no-lock-in-contract policy, no setup fees, free paper rolls, 24/7 Australian support, 450+ POS integrations, and the ability to mix-and-match no-cost and low-cost terminals in the same business — and Payee offers a genuinely compelling package that most competitors can’t match comprehensively.

For businesses processing significant card volumes, moving from a provider charging 1.4–1.6% to Payee’s 0.79% rate represents a reduction of nearly half in processing costs per transaction. Over the course of a year, that difference adds up to serious money.

What This Means for Your Customers

The case for making the switch isn’t just financial — it’s also about the experience you create for your customers.

Australians are increasingly frustrated by payment surcharges. RBA survey data shows approximately three quarters of consumers believe surcharging is unnecessary and should stop. When a customer sees a café charging 1.5% to use tap-and-go, it creates a moment of friction and a negative impression — even if they understand the reason. In a competitive market, that friction matters.

By moving to a low-cost EFTPOS model and absorbing the processing fee, you offer your customers something increasingly rare: what they see is what they pay. No small print. No awkward moment at the terminal. No customer wondering whether to switch to cash to avoid the fee.

That transparency builds trust. It simplifies the checkout experience. And it aligns your business with where consumer expectations — and now the regulatory landscape — are clearly heading.

Getting Started with Payee

The practical barrier to switching is lower than most businesses expect. Payee’s onboarding process is designed for speed: most businesses are processing payments within 24–48 hours of signing up. Terminals arrive pre-configured and ready to go. The setup is plug-and-play, and Payee’s 24/7 support team is available if anything needs attention along the way.

There are no lock-in contracts, no setup fees, no cancellation fees, and no exit fees — so there’s no financial risk in getting started. Payee will build a custom payment solution around your specific business needs: your turnover, your transaction sizes, your industry, and your mix of in-store and online sales.

With Australia’s payments landscape undergoing its most significant transformation in two decades, the businesses that move early — with the right low-cost provider and the right pricing strategy — will be best positioned to come out ahead.

To explore Payee’s solutions and get a custom quote for your business, visit payee.net.au.

This article is intended for informational purposes. Merchants should seek independent financial advice when assessing the impact of payment processing changes on their specific business.