Australian insurance brokers have three weeks to resolve a cost problem the Reserve Bank of Australia’s (RBA) headline saving figure was not built to fix – and a compliance question buried in their merchant agreement that most will not know the answer to without asking.
From October 1, 2026, surcharging ends on eftpos, Mastercard, Visa, and American Express. The National Insurance Brokers Association (NIBA) published guidance on September 9, 2026, setting out what practices must do before the deadline. It identifies a structural problem specific to broking that separates this change from its effect on almost every other business facing the same date.
The RBA expects its reform package to save businesses $910 million a year in reduced transaction fees. That figure, reported by ABC News at the time of the March 2026 announcement, is built on cuts to consumer card interchange fees – dropping from 0.80% to 0.30% on October 1. Commercial credit cards keep the 0.80% cap.
For a broker whose clients are predominantly businesses paying premiums on corporate cards, the surcharge disappears on October 1 without any corresponding fee reduction. American Express – which carries a significant share of commercial card transactions in Australia and sits entirely outside RBA interchange regulation – is in the same position.
NIBA’s guidance is direct: brokers should map their actual card mix before assuming the system-wide saving applies to their own practice.
A card fee in a broking practice is not a margin on a product. It is the cost of collecting premium and government charges on behalf of a client – money that comes out of what the broker retains. Brokers collectively handled $35.6 billion in gross written premiums through the intermediated channel in FY25, according to NIBA’s 2025 research. Practices currently recover card acceptance costs through fees of 1% to 2% on card payments. From October 1, that cost becomes an overhead with nowhere automatic to go.
For licensees, the exposure extends beyond their own office. Every authorised representative’s invoicing system, terminal, and payment page is part of the compliance picture. As NIBA states in its guidance: “You remain liable for your representatives’ conduct, and they are the ones running the invoice templates, terminals, and payment pages that have to change.”
Stripe has confirmed it will disable surcharging support on designated networks from October 1. Tyro has stated the RBA instructed acquirers and terminal providers to remove surcharging functionality and will do so automatically on that date. Square will do the same.
The RBA has confirmed that if a card payment is made on or after October 1, surcharging may no longer be available even if the invoice was issued earlier. That creates a specific problem for instalment and mid-renewal clients. A client surcharged on earlier payments in a multi-instalment arrangement will see no surcharge on amounts due from October 1 – with no explanation, unless the broker has already communicated the change. NIBA advises identifying those clients now, before the discrepancy appears on a statement.
The Australian Competition and Consumer Commission (ACCC) has flagged misleading surcharging practices as a compliance and enforcement priority for the 2025-26 financial year. Deputy chair Mick Keogh said in April 2025: “Businesses need to ensure their customers know about any card payment surcharges upfront, and that they are only charging what it costs them to accept those card payments.”
On the ban itself, the ACCC has been direct: “A business can’t escape the ban by calling a card payment surcharge something else.” A service fee or handling fee that applies only to clients who pay by card is a surcharge under another name and may constitute misleading conduct under Australian consumer law.
Brokers may raise fees to recover card costs, but any increase must apply to all clients regardless of how they pay. The ACCC also warns against attributing a broader price rise solely to the surcharging change when other cost pressures are also a factor.
This is where a payment reform becomes a compliance obligation under existing law. Under Division 2 of Part 7.8 of the Corporations Act 2001 – specifically section 981B – and regulation 7.8.02 of the Corporations Regulations 2001, premium paid by a client remains client money until it reaches the insurer. NIBA’s position is that the full premium must reach the trust account, with merchant service fees paid from the broker’s own funds. Whether that is straightforward comes down to one question: how does the broker’s acquirer settle?
On a gross arrangement, the full premium lands in the trust account and the acquirer debits fees separately. Nothing changes. On a net arrangement – the most common model in card acquiring, according to PXP Financial – the acquirer deducts its fee before settlement. Less arrives than the client paid, while the full amount remains owing to the insurer.
Brokers on net arrangements need a funded process to cover that shortfall from their own funds on the day of every settlement. NIBA says many practices will not know which arrangement they are on without asking their acquirer directly. That question needs an answer before October 1.
BPAY, EFT, and direct debit fall outside the ban entirely. Offering clients a reduction for paying by those methods remains the compliant way to steer premium collection toward lower-cost channels – and NIBA notes the RBA has confirmed discounting remains permitted.
From October 30, 2026, NAB and other major acquirers must publish average merchant service fees quarterly, and businesses will receive detailed statement breakdowns including consumer versus commercial card splits. NIBA advises using that information to hold providers to account on whether the interchange reductions are being passed on, noting nothing in the reform package compels them to do so automatically.
