Councils Warn They May Ban Credit Cards Over Surcharge Changes

Local councils are warning that they may have to stop accepting credit card payments, saying recent changes to card surcharge arrangements leave them with few workable options.

The concern centres on the fees that come with accepting card payments. Every time a customer pays by credit card, the business or organisation receiving the money pays a processing fee. For years, many merchants have passed some or all of that cost on to customers through a surcharge. Councils have often done the same for rates, fines, permits and other services.

Under the changes, that option is being restricted. Councils say that if they can no longer recover the fee from the person paying, they will be left to absorb it themselves. Because they are funded largely by ratepayers, any money spent on card fees is money that cannot go towards roads, parks, waste collection or community services.

For some councils, the simplest answer may be to take credit cards off the table altogether. That would push residents towards other ways of paying, such as direct debit, BPAY, bank transfer, or paying in person with a debit card or cash.

The prospect has drawn a strong reaction, and the story has become part of a wider debate about card payments in Australia. Supporters of limiting surcharges argue that customers should not be hit with extra charges just for choosing how they pay. Critics say the cost of accepting cards does not disappear when the surcharge does. It simply moves to someone else.

For households, the practical effect is likely to vary from council to council. Some ratepayers use credit cards deliberately, either to collect rewards points or to manage cash flow by spreading a large rates bill over a billing cycle. Losing that option could be an inconvenience, particularly for those who rely on the interest-free period to cover big quarterly or annual payments.

Councils may also face an administrative load if they shift more people to other payment methods. Direct debit arrangements need to be set up and managed, and some residents are less comfortable with online banking or bank transfers.

Residents who currently pay council bills by credit card should check their council's website or most recent rates notice for any announcement about payment options. Councils generally have to give notice before changing how they accept payments, and many offer payment plans for those who need more time.

The final shape of the changes, and how each council responds, is still developing. This article is based on a brief report and will be updated as more detail becomes available.