---
title: "Hospitality merchants: surcharge ban survival guide"
description: "Cafés, pubs, restaurants — the October 2026 surcharge ban hits hospitality hardest. Here's what to do."
category: industry-guide
published: 2026-04-28
source: https://readiness.aps.business/blog/hospitality-surcharge-ban-survival-guide
reading_time: 7 min
---

# Hospitality merchants: surcharge ban survival guide

High volume, thin margins, and a surcharge ban hitting in 5 months. Here's the hospitality-specific playbook for the October 2026 RBA changes.
Hospitality is the industry hit hardest by the October 2026 surcharge ban — high card-payment volumes, thin margins, and a customer base that pays predominantly by tap. If you run a café, pub, restaurant, or bar, here's a hospitality-specific playbook.

## Why hospitality is the hardest hit

Three factors compound to make hospitality particularly exposed:

-   **High card mix.** Most hospitality venues see 80%+ of payments by card. The surcharge ban removes the ability to recover any of that cost.
-   **Thin operating margins.** Industry-typical hospitality margins sit at 6-12% pre-tax. Absorbing a 1.5% surcharge wipes out 15-25% of profit.
-   **Price sensitivity.** A coffee priced 30 cents higher feels different than a $40 dinner priced $1 higher. Hospitality has less room to absorb costs through pricing than other industries.

The good news: hospitality is also the easiest industry to optimise. The combination of high volume + simple transactions + tap-to-pay dominance means small rate improvements compound fast.

## Your three levers

### 1\. Get your effective rate down

Most hospitality venues are paying 1.4%-2.2% all-in on card processing. Anything above 1.4% is renegotiable, and most flat-rate providers will offer a discount to keep your business in the lead-up to October. The biggest single move: [compare your current rate](/lp/rate-comparison) against the 19 major AU providers based on your actual volume. Most venues find $400-$1,200/month in unrealised savings.

### 2\. Enable least-cost routing (LCR)

Almost every hospitality merchant accepts tap-to-pay debit. Without LCR, those debit transactions route over Visa or Mastercard's network, costing roughly 1% per transaction. With LCR enabled, they route over eftpos, costing roughly 0.2%. On a typical hospitality merchant doing $50K/month with 60% debit, that's **$240/month saved** by flipping a switch your provider has to enable. Ask them — most won't enable it unless you ask.

### 3\. Adjust pricing strategically

Hospitality has more room than you'd think to nudge prices in October. The trick is to move them in groups, not flat-line:

-   Move signature items (most-ordered) by 50 cents to $1, not 1.5%
-   Round drink prices up to the next dollar where it makes sense
-   Raise weekend / peak prices but leave weekday lunch specials untouched
-   Move banquet / function pricing up by 2-3% (less price-sensitive than walk-in)

## Hospitality-specific gotchas

### Tipping is unaffected — but tip flow may not be

The ban is on surcharges, not tips. Tips you pass to staff still flow as before. But: if your provider's tip-handling has been quirky, October is a good moment to clean it up. Same-day settlement (offered by APS and a few others) gets tips into your account that night instead of 1-3 days later — important for staff cash flow.

### Function deposits + bookings

If you take function deposits via card, those incur surcharges today. After October, the deposit cost goes to you. For high-deposit operators (weddings, large events), that's a noticeable hit — re-price function packages to absorb it.

### Delivery platforms — different rules

Uber Eats, DoorDash, and Menulog have their own commission structures, separate from card surcharges. Those don't change in October. Your in-platform card processing is bundled into their commission and isn't affected by the RBA ban.

## The 90-day plan

| When | What |
| --- | --- |
| This week | Run the hospitality readiness check to get your dollar exposure. Pull your last 3 statements and calculate your actual effective rate. |
| Weeks 2-3 | Enable least-cost routing with your current provider. Get 2-3 competing quotes. Negotiate. |
| Weeks 4-6 | If switching providers: order new terminals, schedule the cutover. Plan the price adjustments you'll make in October. |
| Weeks 7-10 | Test pricing changes on a subset of items. Watch volume + margin closely. Tune. |
| Sept 1-30 | Disable surcharging on your terminal. Roll out final pricing. Update menus / signage. |
| Oct 1 | Surcharge ban active. You're prepared. |

## Get your specific plan

The [hospitality readiness check](/lp/hospitality) is built specifically for cafés, pubs, restaurants, and bars. 60 seconds, your dollar exposure, your tailored 90-day plan emailed to you.

Or call APS directly on [**1300 096 983**](tel:1300096983) for a free assessment of your venue.