1 October 2026. While that may mark today, it also marks the day when credit card surcharges are supposed to be coming to an end. It’s also the day that the Australian Tax Office announced that it will stop accepting credit card payments. That’s right – you’ll no longer be able to pay your tax by credit card.
In an announcement on its website, the ATO says
Following the Reserve Bank of Australia’s Review of Merchant Card Payment Costs and Surcharging, the ATO will stop accepting credit cards as a payment method after 30 November 2026.
As a government agency, the ATO has decided it would not be appropriate for the cost of credit card merchant fees to be transferred to the community.
A Small (Fee Free) Window of Opportunity
While credit card payments may come to an end at the end of November, it leaves an interesting small window of opportunity. You can still pay be credit card until that time, and as of now, there is no surcharge on the credit card payment.
Until yesterday, depending on your card, you would have been paying a surcharge of between about 1% and 2%. That basically gives you two months in which you can make payments to the tax office without a surcharge.
Other Options
It is probably worth noting that paying the tax office directly with your credit card was not always the best deal. Many credit card reward programs had either reduced, or no earnings, when paying the ATO. As such, many didn’t not directly use their credit card.
Depending on how keen you were there were other options. For example, you could often buy pre-paid visa or mastercard cards with bonus points that you could use. Unfortunately, these options will no longer work.
Another option is to use one of the B2B payment services, and there are a few of these around. These include the likes of pay.com.au or RewardPay. In essence, you make a payment through one of these services, and they make the payment on your behalf. They do charge a service fee for this service (which varies, but is around the 2% mark). However, many find this worthwhile as a way of accumulating points.
What will other businesses do?
Given that the ATO had decided to stop taking credit cards, it is useful to ponder what other businesses my do. Of course, the ATO is not really a business as such, and is collecting taxpayer money, but some of the decision processes may be similar.
There has certainly been a lot of recent news coverage from small businesses saying they can’t absorb the costs. As such, they could either stop taking cards, or raise prices across the board.Competitive pressure, and the move towards a more cashless economy may restrict how many can dump credit card payments altogether.
The other option is to incorporate the costs into the prices charges. This would see a small bump in the cost of goods. Indeed, the RBA estimates that by incorporating these costs into prices, there will be a small increase (of around 0.1%) in inflation.
Interestingly, there is another option. The ACCC has stated that businesses can offer a discount for cash payments. So instead of surcharging card payments, you can offer discounts for cash. It’s certainly an option that I have seen around South East Asia.
Final Words
The ATO’s decision to remove credit card payment fees highlights that the ban of surcharges is more complicated than first meets the eye. While it may sound good to get rid of those pesky surcharges, t could reshape how businesses approach card acceptance.
If you are a points collector, it will be worth paying attention to which merchants continue accepting card payments. If prices remain the same regardless of payment method, using a rewards-earning credit card can help you maximize points without any extra cost.
