From 1 October, Australian businesses can no longer add a surcharge when a customer pays with an eftpos, Mastercard or Visa card, and American Express, UnionPay and PayPal have said they will drop surcharging too. The fee does not vanish; it lands on your margin. The one lever the Reserve Bank has deliberately left open is the discount: you can still make a cheaper payment method more attractive, and for most businesses that cheaper method is a bank-to-bank payment through PayID or PayTo.

Should you add one? For a business with repeat customers, large invoices or subscriptions, usually yes. For a cafe selling $6 coffees, probably not yet. Digital One Agency builds payment flows into checkouts, customer portals and apps, and if you want someone to cost it for your business you can book a meeting and we will tell you plainly whether it pays back.

What the ban leaves open

The Reserve Bank’s conclusions paper, released on 31 March, removes surcharging on debit, prepaid and credit cards on the eftpos, Mastercard and Visa networks from 1 October 2026. Its own estimate is that consumers pay $1.6 billion of the $1.8 billion in card surcharges collected each year, and that only 16 per cent of merchants surcharge at all. If you were in that 16 per cent, a line of revenue disappears on 1 October.

Two things in the RBA’s frequently asked questions matter more than the headline. First, businesses “can continue to offer discounts for particular payment methods”. Second, the RBA “does not currently regulate surcharges on non-card payment methods”. Put together, the policy is not asking you to eat your costs silently. It is asking you to stop penalising card users and start rewarding whoever costs you less.

CommBank’s own explainer, published on 28 September, is a useful reminder of the edges: weekend and public holiday surcharges, booking fees and service fees are not part of this change. A “service fee” that is really a card fee under another name is the kind of thing that attracts attention, so do not try that.

What cards actually cost you from 1 October

The wholesale side is getting cheaper. Interchange on consumer credit cards falls from 0.8 per cent to 0.3 per cent, and the RBA’s executive summary expects the package to cut merchants’ wholesale card costs by around $910 million a year. What you pay is not interchange, though; it is your merchant service fee. Writing in The Conversation, UTS researcher Vibhu Arya puts current acceptance costs at 0.43 per cent for an eftpos debit card, about 1 per cent for Visa or Mastercard credit, and up to 1.36 per cent for American Express, and notes that Commonwealth Bank is cutting its flat merchant rate from 1.10 per cent to 0.99 per cent.

Those are the numbers to hold your provider to. Acquirers must publish a measure of how much of the interchange cut they pass through, quarterly for the first four quarters, with the first data due by 30 January 2027. Until then, the only way to know whether your rate fell is to read your October statement against your September one.

PayID and PayTo in plain English

Both run on the New Payments Platform, the real-time rails that also carry Osko transfers between Australian bank accounts.

PayID is an address for a bank account: a phone number, email or ABN. The customer opens their banking app, pays your PayID, and the money arrives in seconds. The customer starts every payment. That suits invoices, deposits, one-off orders and in-person sales where the customer is happy to tap through their banking app.

PayTo runs the other way. According to Australian Payments Plus, which runs the platform, the business sets up an agreement covering “amount, purpose, and frequency”, the customer sees it in their online banking and authorises it, and payments then flow in real time on those terms. It handles one-off, ad hoc and regular payments, which makes it a modern replacement for direct debit forms and, in some cases, for a card on file. To offer it you need to be sponsored as a PayTo user, which in practice means going through your bank or a payment provider.

Where customers actually are

This is the part the vendor pitches skip. The RBA’s May 2026 consumer payments bulletin found account-to-account payments were just 4 per cent of all consumer payments in 2025, up from 3 per cent in 2022. Cards were 73 per cent: debit 49, credit 23. Cash was 15.

Inside that small slice, PayID is gaining fast. Awareness rose from 57 per cent of consumers in 2022 to about 80 per cent in 2025, and about half of consumers now use it, including 72 per cent of 18 to 29 year olds. PayTo is much earlier: it made up about 4 per cent of account-to-account payments. Among people who had not used it, 66 per cent said their existing methods were good enough and 36 per cent were not familiar with it.

So add PayID or PayTo as an option, not a replacement. Remove cards and you lose sales. Caroline Tran, chief executive of a PayID payments company, makes the same point in SmartCompany on 29 September, while arguing that the fee gap is worth chasing: she puts the average card fee at 1.5 per cent and PayID at under 0.5 per cent. Treat those as a vendor’s figures and check them against your own quotes, but the direction is right.

A quick test of whether it pays

Here is the arithmetic, using the figures above rather than invented ones.

Take a business turning over $2 million a year on cards at CommBank’s new 0.99 per cent flat rate. That is $19,800 in fees. Suppose a small discount persuades 15 per cent of that revenue, $300,000, to move to PayID or PayTo at 0.5 per cent. The saving on that slice is roughly $1,470 a year. Now take the same business at Tran’s 1.5 per cent average card fee: the same shift saves about $3,000.

Neither figure pays for a custom build on its own. The numbers change when three things are true:

• Your tickets are large. A trades business sending $8,000 invoices, a clinic with $3,000 treatment plans, or a wholesaler on account saves real money per transaction, and those customers already pay by bank transfer. PayID simply makes it traceable and instant.
• Your revenue is recurring. Subscriptions, memberships, rent, instalment plans and B2B retainers are exactly what PayTo agreements were designed for. Card-on-file also fails when cards expire or get reissued; a bank account changes far less often.
• You were surcharging. If you were in the 16 per cent, the surcharge was covering real cost. A payment-method discount is now the legitimate way to steer, and it recovers part of what you just lost.

If none of those describe you, keep your cards, negotiate your rate, and spend the effort elsewhere.

What it takes to build it properly

Turning on PayID in a bank account takes an afternoon. Making it work inside a checkout, app or customer portal without creating a reconciliation mess is the real job.

Matching payments to orders. A customer who pays your PayID from their banking app may type the wrong reference or none at all. A proper build gives each order or invoice its own payment details through a provider, so every incoming payment matches itself and the order moves to paid without anyone opening a spreadsheet.

The checkout screen. PayTo means the customer leaves your checkout, approves the agreement in their banking app and comes back. Get the waiting state, timeouts and “I approved it but nothing happened” path right, or they abandon. We treat this like any other conversion problem: test it on real phones with real bank apps.

Refunds and failures. Bank payments do not have a card-style chargeback process, which is good for the merchant and a trust question for the customer. Your refund process needs to be as easy as a card refund, and your terms should say how it works.

Subscriptions and billing logic. Moving a membership base from cards to PayTo means migrating customers with consent, handling amount changes within the agreement’s limits, and keeping card as a fallback.

Pricing display. If you offer a discount for paying by bank, show it clearly as a discount off the advertised price. The advertised price must be what a card customer pays.

If your checkout was built on a platform plugin, some of this may already exist. If it was built for you, or lives inside a custom app, it is development work. Our earlier piece on what the surcharge ban does to your checkout software covers the clean-up you need regardless.

What we do about this

Digital One Agency builds fintech platforms, custom apps and checkouts for Australian businesses. For this change, the work usually runs in three steps.

First, a costing: we look at your payment mix, ticket sizes, repeat rate and current merchant rate, and tell you whether PayID or PayTo pays back for you, using your numbers rather than a vendor’s. Sometimes the honest answer is “negotiate your card rate and stop there”.

Second, provider selection. You will need a bank or payment provider to sponsor PayTo and generate per-order PayID details. We compare the options on fees, API quality and how refunds work, using quotes for your volumes.

Third, the build: checkout and app flows, automatic reconciliation into your order or accounting system, subscription migration, and the pricing display. Timing depends on how your current checkout is built; we give you a fixed scope before any work starts. For a sense of how app and platform costs are set, our guide to what it costs to build an app in Australia sets out what moves the price.

Why us rather than your bank’s default plugin? The plugin gets you a payment button. It does not reconcile into your systems, test the approval flow on real devices, or tell you whether the discount you are about to offer costs more than it saves.

Your next step

Book a meeting with Digital One Agency. Bring your last three months of merchant statements and a rough split of how customers pay you. In one conversation we will tell you what the surcharge ban costs you, whether a bank-payment option would win it back, and what building it would take. If it does not pay, we will say so.

Frequently asked questions

Can I still charge extra for card payments after 1 October 2026?

No, not on eftpos, Mastercard or Visa cards, and American Express, UnionPay and PayPal have said they will remove surcharging from the same date. Weekend and public holiday surcharges, booking fees and service fees are outside this change, but a fee that is really a card fee under another name is a risk.

Am I allowed to give a discount to customers who pay by PayID or PayTo?

Yes. The Reserve Bank's FAQs say businesses can continue to offer discounts for particular payment methods. Show the discount as a reduction from the advertised price, and make sure the advertised price is what a card customer pays.

What is the difference between PayID and PayTo?

PayID is an address for a bank account, such as a phone number, email or ABN, that customers pay from their banking app. PayTo is an agreement the customer approves in their banking app that lets a business collect one-off or recurring payments on agreed terms. PayID suits invoices and one-off orders; PayTo suits subscriptions and recurring billing.

Should I stop accepting cards and only take bank payments?

No. Account-to-account payments were only 4 per cent of Australian consumer payments in 2025, against 73 per cent for cards, according to the Reserve Bank. Removing cards costs sales; adding a cheaper option with a small incentive is the realistic play.

How long does it take to add PayTo to an app or checkout?

It depends on how your checkout is built and which provider sponsors you. A platform plugin can be quick; a custom app with reconciliation into your accounting system and subscription migration is a scoped development project. We give a fixed scope after reviewing your current setup.