Before You Surcharge, Benchmark Your Base Rate

What Australia changed

According to NAB's merchant guide, from October 1, 2026 businesses across Australia can no longer surcharge debit, prepaid or credit card payments, and lower domestic interchange caps took effect the same day. A business there that used to add a card fee at checkout now has to cover that cost in its prices. Nothing changed in the United States, where surcharging is allowed within card network rules and state law.

The full background: Australia banned card surcharges: what to learn

A surcharge moves the cost; it does not shrink it

Whether a customer pays a separate card fee or a slightly higher shelf price, your processor charges you the same amount. A surcharge also has limits of its own. Card network rules generally do not allow surcharges on debit or prepaid cards, generally cap a credit card surcharge at what accepting that card costs you, and require clear disclosure, and some states restrict surcharging further. Rules can also change, as Australia shows. A lower base rate keeps paying off under any rule, whichever way the cost is labeled.

What your base rate is made of

Your processing cost has layers, and only some of them are open to negotiation. Knowing which is which keeps the conversation with your provider on the parts that can move.

Benchmark it on your own statement

Start with your effective rate: total fees divided by total card sales. Then split the fees into the card network costs that pass through and everything your provider adds. Express the provider's markup as a percentage plus a per-item amount, and list every account fee by name. Ask at least two other providers for written quotes based on the same statement, so volume, card mix and average sale match. The gap between those quotes and what you pay now is the real negotiating room, and it exists whether or not you surcharge.

Prepare the conversation: How to negotiate credit card processing rates

Then decide whether to pass on the cost

Once the base rate is right, the surcharge question gets smaller. A lower cost means a smaller surcharge if you keep one, or none at all if building the cost into prices is simpler for your customers. If you do pass on the cost, choose between a surcharge and a cash discount based on where you sell, how many of your customers pay by debit, and the disclosure each option requires.

Compare the two programs: Cash discount vs surcharging

What changes for small, mid-size and enterprise businesses

A small business usually gets the most from removing account fees it does not need and moving to transparent pricing, before deciding whether a surcharge is worth the signage and customer questions. A mid-size business selling in several states should benchmark once for the whole business, then check surcharge rules state by state, since a program allowed in one state may not be in another. Multi-location and enterprise merchants have the most negotiating weight: they should benchmark markup by merchant account and channel, put pass-through pricing and fee caps in writing, and model what their card costs would look like if surcharging became unavailable, as it did in Australia.