Sep 21, 2026

Card surcharges are being banned from 1 October. Here is what actually changes.

A practical guide for independent orthodontic practices on what the reform covers, what it does not, and what to review before the change takes effect.

From 1 October 2026, practices generally cannot add a separate surcharge when a patient pays by the major card schemes. The more useful exercise is to understand how patients are actually paying, what each payment method costs the practice, and whether any pricing or payment-plan changes are needed.

From 1 October 2026, Visa, Mastercard and eftpos will no longer permit merchants to add a separate surcharge to payments made through their networks. American Express is also removing surcharging from the same date. This covers credit cards, debit cards and prepaid cards. 

For orthodontic practices, the rule itself is relatively straightforward. The complication is that many practices use recurring treatment-plan payments, stored cards and third-party payment platforms, and the name used internally for a payment method does not always tell you how the payment is actually processed. 

The practical question is therefore not simply “do we use direct debit?” It is “what payment rail is actually being used?” 

1. What is changing? 

At present, businesses can generally pass on the reasonable cost of accepting a card by applying a card surcharge. From 1 October, the major card networks will prohibit that separate surcharge. 

The processing cost itself does not disappear. Your bank or payment provider may still charge the practice merchant, transaction, gateway or platform fees. The difference is that the practice can no longer separately pass a card acceptance cost to the patient as a card surcharge. 

The RBA has also reduced some interchange fee caps from 1 October. That may reduce underlying card costs for some practices, but interchange is only one component of the total fee charged by a payment provider. Practices should therefore assess the actual post-change cost rather than assume their historical surcharge percentage is the amount that needs to be recovered elsewhere. 

If your practice accepts UnionPay or PayPal, check those arrangements separately as well. UnionPay is moving to no surcharging from 1 October, while PayPal’s equivalent change takes effect from 5 October. 

2. Credit card, debit card and direct debit are not the same thing 

This is the distinction most likely to cause confusion. 

A Visa or Mastercard debit card is still a card. If the payment is processed using the card number through a card network, the new card surcharge rules apply even if the card draws money directly from the patient’s transaction account. 

A genuine bank-account direct debit is different. In a traditional Australian direct debit, the patient authorises payments to be taken from their bank account using their BSB and account number. These payments are generally processed through the Bulk Electronic Clearing System (BECS), rather than through Visa or Mastercard. 

PayTo is another account-to-account payment method. The patient authorises a payment agreement through their online banking and payments are made directly from the bank account. It can be used for regular payments and other recurring arrangements. 

The current reform is a card surcharge reform. It does not impose the same no-surcharge rule on genuine bank-account direct debit, PayTo, bank transfer or PayID. Any separate fee on those methods still needs to comply with the provider agreement and normal Australian Consumer Law requirements.

A simple way to think about it 

• How the patient pays	Card surcharge change applies?
  Visa credit card	Yes
  Mastercard credit card	Yes
  Visa debit card	Yes
  Mastercard debit card	Yes
  eftpos card	Yes
  American Express	Yes
  Bank-account direct debit (for example, BECS)	No, not under this card surcharge reform
  PayTo from a bank account	No, not under this card surcharge reform
  Bank transfer / PayID	No, not under this card surcharge reform

The key test: if the patient’s Visa, Mastercard, eftpos or American Express credentials are being charged, it is a card payment. If money is being pulled directly from the bank account through an account-to-account method, it is not a card payment. 

3. What if we use a third-party payment provider?

Using a third-party provider does not, by itself, take the payment outside the new rules. What matters is the underlying payment method. 

A single payment platform may support several different methods. For example, the same provider could offer: 

• bank-account direct debit 
• recurring Visa or Mastercard payments 
• PayTo 
• BPAY or bank transfer 
• payment links that allow the patient to choose between several options 

A practice may refer to all monthly instalments as “direct debit”, but that label can be misleading. If the provider stores the patient’s card details and charges the card each month, it is a recurring card payment and the card surcharge change applies. If the patient has supplied a BSB and account number and the provider is debiting the bank account through an account-to-account arrangement, it is different. 

Questions to ask your payment provider now 

1. Are our recurring patient payments being collected from bank accounts or from cards? 

2. Which of our payment methods are affected from 1 October? 

3. Will you automatically remove any patient card surcharge, and on what date? 

4. What processing fees will the practice pay after the change? 

5. Do we need to change existing recurring payment arrangements, payment links or integrations? 

6. If your platform charges patients any separate service or processing fee, how will that fee work after 1 October? 

Do not assume that a fee charged by a third-party platform is unaffected simply because the platform, rather than the practice, collects it. The provider should confirm exactly what the fee relates to, how the underlying payment is processed and whether its customer-facing charges are changing. 

4. What about existing treatment plans?

This is particularly relevant to orthodontic practices because treatment payment arrangements often continue for 12 months or longer. 

A patient may have signed a treatment agreement months ago that refers to a card surcharge. That does not mean the practice should assume the surcharge can continue after 1 October. The RBA’s guidance focuses on the payment when it is made, so future card instalments need to be reviewed even where the original agreement predates the change. 

Practices should identify patients who: 

• have monthly instalments charged to a stored credit or debit card 
• have a treatment agreement or fee schedule that refers to a card surcharge 
• have future card payments already scheduled 
• have outstanding invoices or payment links containing card surcharge wording 

If the monthly payment is a genuine bank-account direct debit rather than a card transaction, the card surcharge rule itself is not the issue. The practice should still confirm the provider’s pricing and any separate fees that apply. 

5. The cost has not disappeared 

If your practice currently pays a merchant fee and recovers that amount through a patient surcharge, from October more of that cost may sit with the practice. 

That does not mean treatment fees should automatically increase by the old surcharge percentage. The better starting point is to calculate the actual cost. 

A useful question is: “How much did the practice spend on payment processing over the last 12 months, and how much of that was recovered from patients?” 

Then separate the answer by payment method where possible. Card costs, bank-account direct debit costs and platform fees can differ materially, and only part of practice revenue may be collected by card. 

The change is therefore an opportunity to review both the provider and the payment mix before making a pricing decision. 

6. Should practices reconsider their treatment-payment arrangements?

Potentially, but the surcharge change alone is not a reason to move every patient away from cards. Cards remain convenient and widely used. The point is to understand the economics and operational impact of the available options. 

• Consideration	Card payment	Bank direct debit / PayTo
  Patient convenience	High	High once established
  Separate card surcharge after 1 Oct	No	Card rules do not apply
  Practice transaction cost	Provider dependent	Provider dependent
  Card expiry / replacement	Can affect collection	Not applicable
  Recurring payments	Yes	Yes
  Integration with practice systems	Provider dependent	Provider dependent
  Failed payment management	Provider dependent	Provider dependent

PayTo may increasingly be relevant for recurring treatment payments because it provides an account-to-account alternative to traditional direct debit, with the payment agreement authorised and visible through the patient’s banking environment. Whether it is appropriate depends on the provider, integration and practice workflow. 

7. What should practices do before 1 October? 

1. Map how you currently collect money. List EFTPOS, online card payments, stored or recurring cards, bank-account direct debit, PayTo, payment links and any third-party platforms. Do not rely solely on what the payment method is called internally. 

2. Speak to each payment provider. Confirm which payment rails you use, what they will change automatically, when they will change it and what the practice will pay afterwards. 

3. Review existing patient payment plans. Identify recurring card arrangements and agreements that refer to a card surcharge. Make sure future card instalments will not keep adding that fee. 

4. Update patient-facing information. Check treatment agreements, payment-plan documentation, websites, invoices, fee schedules, reception signage, automated emails and payment links. 

5. Understand the financial impact. Review annual card processing fees, surcharge income, card-payment volume, direct-debit costs and the pricing offered by your current provider. 

6. Test the change. Run transactions after implementation and review the first merchant or provider statement to confirm that surcharges have stopped and the practice is being charged what it expected. 

The practical takeaway 

For most practices, the compliance element should not be particularly complicated: from 1 October, do not separately surcharge patients for the major card types. 

The more valuable exercise is understanding what sits underneath your current payment arrangements. A monthly “direct debit” might be a genuine bank-account debit, or it might actually be a recurring Visa or Mastercard transaction. A third-party provider might process either. The name of the platform is not what determines the answer. 

Before changing treatment fees or payment arrangements, establish three things: 

• How are we collecting our payments? 
• What is each payment method actually costing us? 
• What changes, if any, does our provider require from 1 October? 

For many practices, that review may ultimately be more valuable than the surcharge change itself. 

Note: This article is general business guidance, not legal advice. Payment-provider arrangements can differ, so practices should confirm the treatment of their own payment channels and fees directly with their provider. 

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_{Sources and further reading} 

• _{Reserve Bank of Australia – Review of Retail Payments Regulation: FAQs} 
• _{Reserve Bank of Australia – Impact and implementation} 
• _{ACCC – Card surcharges} 
• _{Australian Payments Plus – PayTo for businesses}