What Rising Card Fees Mean for Small Businesses

Pull up your last card processing statement, then find one from a year ago and put them side by side; odds are the numbers won't match, not in your favour, at least. Here's the cold, hard truth: card fees have been quietly rising for years for businesses across the US, UK and EU, and Australia's about to see the biggest shake-up to its own card payment rules in years. From 1 October 2026, the Reserve Bank of Australia is banning surcharging on designated debit, prepaid, and credit card payments entirely, while also cutting the interchange fee caps that sit underneath those surcharges.

If you run a small business, this is more than just background noise. Card fees are one of those costs that rarely get their own line in the budget; they just sit there in the background, nibbling away at your margin on every single sale. And because they're usually a percentage of the transaction rather than a flat number, they scale up right alongside your success. The busier you get, the more you pay, which is a strange kind of cost to have so little control over, especially with the rules about to change.

So let's actually unpack what's going on: what's changing, why fees have still been climbing regardless, and what a small business can realistically do about it.

What's actually in a "card fee"?

When we talk about card fees for a small business, what does that actually mean in practice? Usually, this fee encapsulates three separate things, all lumped together into what's known in Australia as your Merchant Service Fee, or MSF:

• Interchange fees: This goes to the cardholder's bank, paid by your bank when you accept a card payment. Interchange caps are actually being lowered from 1 October 2026, down from as high as 0.8% to 0.3%, with new caps on foreign-issued cards following from 1 April 2027, dropping from an unregulated rate that can currently run as high as 2.4% down to 1%. That said, the RBA's own review found that weighted-average debit interchange has already fallen to around 6 cents per transaction, below the existing 8-cent benchmark and well under the current cap, meaning some of these caps haven't actually been the binding constraint for a while. Our guide on what credit card processing fees actually are breaks this down further if you want the full picture.

• Scheme fees: Charged by the card networks themselves (Visa, Mastercard, and eftpos) for the use of their infrastructure, separate from interchange. These sit outside the interchange caps entirely, and the Australian Small Business and Family Enterprise Ombudsman has specifically recommended the RBA keep a close eye on scheme fees and acquirer margins, citing overseas evidence that when interchange gets cut, issuers and processors have a track record of raising other fees to compensate.

• Acquirer markup: This is the part your payment processor or POS provider adds on top for themselves. Out of the three, it's the only one you can actually negotiate, since interchange and scheme fees are both set above your processor's head. Worth knowing: the RBA's own review found that small merchants pay significantly higher interchange fees than large ones for accepting the exact same cards, a gap the RBA itself says isn't fully justified by the actual cost difference. If you're comparing providers, our breakdown of how much a card machine actually costs explains exactly how this part of the pricing works; Epos Now's own devices charge a flat 1.70% on Visa and Mastercard.

So there you go! Add up all three, and you get your effective, or "blended," rate: the real all-in percentage you're actually paying once every fee is added together and measured against your total card takings.

Why do card fees keep going up, even with reform on the way?

Ah, that's the million-dollar question, right there. To answer this, it's important to understand that a few different things are happening at once, so don't just assume the October 2026 changes fix everything overnight. Here's what's going on:

• The surcharge ban removes a cost-recovery tool a lot of small businesses relied on: Around 16% of merchants currently surcharge designated card payments, and from October 2026 they won't be able to anymore. The lower interchange caps are meant to offset that loss, but not everyone agrees they will; some business owners argue the interchange reductions may not fully cover what they were previously recovering through surcharges.

• Foreign card fees stay high for a while yet: The new 1% cap on foreign-issued cards doesn't kick in until April 2027, so until then, these transactions remain unregulated and can run as high as 2.4%, a real cost if you serve a lot of overseas tourists or online customers.

• Scheme fees and acquirer margins aren't capped at all: As above, this is exactly the layer the ASBFEO has flagged as the place costs could quietly climb back up, even as interchange itself comes down.

• History suggests savings don't always reach small businesses in full: A European Commission review of the EU's own interchange fee cap found that only around 45% of the interchange reduction was actually passed on to merchants, with larger merchants on unblended pricing plans seeing more of the benefit than smaller ones. It's a genuine open question whether Australian small businesses will see the full value of the October 2026 cuts, or whether processors quietly absorb some of it as margin.

The RBA itself is optimistic about the overall picture: it estimates the reforms could save Australian consumers and businesses up to $1.8 billion a year once fully in effect. But as with most reform, the benefit isn't guaranteed to land evenly, or in full, on every business.

What can small businesses actually do about it?

The good news is that you're not entirely at the mercy of rising fees, and there are things you can do to help take control, both before and after October 2026. Here are a few of our tips:

• Start building payment costs into your pricing now, not in September 2026: Once surcharging ends, any cost you were recovering that way needs to live somewhere else, most likely baked into your prices. Businesses that plan for this early avoid an awkward scramble later.

• Actually read your statements: A huge number of businesses never compare their current processing statement to one from a year ago. Pull both out, and look specifically at your effective rate (total fees divided by total card volume), not just the headline percentage you were quoted when you signed up.

• Know which part of your fee is actually negotiable: Interchange and scheme fees are set above your processor, but the markup they add for themselves is entirely down to them, and it's the one part actually worth having a conversation about.

• Watch what happens to scheme fees and acquirer margins after October 2026: Given the RBA's own regulators have flagged the risk of costs shifting elsewhere once interchange falls, it's worth paying closer attention to your statement in the months after the change takes effect, not less.

• Watch out for foreign card exposure until April 2027: If a meaningful share of your customers pay with cards issued overseas, factor in that these transactions will keep costing more until the new cap arrives.

• Consider whether your POS and payments are properly integrated: A lot of hidden cost and hidden friction comes from stitching together a till system and a separate card machine that don't talk to each other properly. A single, integrated system that handles POS and payments together tends to offer clearer, more transparent pricing and removes a layer of manual error and reconciliation hassle. Epos Now Payments: The Complete Guide covers what to look for in an integrated setup.

The bottom line

Card fees aren't going away, and the parts sitting outside the RBA's reforms, scheme fees and acquirer margins especially, are the ones most likely to keep climbing regardless of what happens to interchange. But rising doesn't have to mean invisible, and Australia's reforms are a genuine, significant attempt to fix a real problem. The businesses that come out ahead won't be the ones who assume the changes solve everything automatically; they'll be the ones who actually understand what they're paying, watch closely as the reforms roll out, and pick providers who don't bury the pricing in fine print, Epos Now Payments being a good example of what that kind of transparency actually looks like.

Your card fees are one of the few genuinely negotiable costs in your business, and it's worth treating them that way.