Hospitality merchants: surcharge ban survival guide

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 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

Get your specific plan

The hospitality readiness check 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 for a free assessment of your venue.