ATO will not budge after snap meeting over credit card ban
By political reporter Erin Handley
Posted about 9h agoabout 9 hours agoTue 6 Oct 2026 at 6:57pm, updated about 3h agoabout 3 hours agoWed 7 Oct 2026 at 12:17am
New regulation has put a ban on card surcharges.(Adobe Stock)
In short:
Business groups have accused the ATO of having "double standards" for refusing to accept credit card payments from November 30.
The tax office said it was not appropriate for it to absorb the surcharge fees itself because that would effectively transfer the cost to the taxpayer.
What's next?
The ATO has stood firm on its decision, despite calling a special forum for frustrated small business groups to discuss the changes.
The Australian Taxation Office (ATO) will not budge on its decision to stop accepting credit card payments from December 1, after holding a snap crisis meeting with business groups angered by the move.
Australia's tax chief convened a meeting with business groups this morning to the discuss the changes in the wake of widespread backlash.
But the ATO has indicated it is not going to reverse the credit card ban, according to a spokesperson from the Australian Chamber of Commerce and Industry (ACCI), which attended the meeting.
"We will continue to seek to have the ban overturned," the ACCI spokesperson said.
The ABC has approached the ATO for comment.
Last week the tax office announced it would stop accepting credit card payments at the end of next month.
That step came in response to the Reserve Bank of Australia's reforms to scrap card surcharges from October 1, which the bank said was "in the public interest" and would save customers about $1.6 billion a year.
The ATO said it would continue accepting credit cards until November 30 to allow for a transition period, saying it was untenable beyond that point.
Small business owners say they have been expected to absorb the fees of card transactions themselves, and have lost the option of using credit card payments to the ATO as a cash flow method.
Some feared the sudden change would mean they needed to source cash quickly to begin paying by debit instead, or they would be forced to go into arrears with the ATO, and that could result in enforcement against their businesses, including possible closure.
Earlier Andrew McKellar, chief executive of the Australian Chamber of Commerce and Industry (ACCI), had called for the ATO's credit card ban to be reversed.
"There is a clear double standard here. Government is telling small business to absorb the hit from the surcharge ban and its cost, while the tax office is saying a different set of rules applies to it," he said.
"Small business is the backbone of the economy. They are doing it tough, with rising costs and a fourth interest rate increase last week."
The Council of Small Business Organisations Australia (COSBOA) said it raised issues for businesses that used credit cards as a cash flow tool and said the decision "warrants a rethink".
"However, the broader issue remains the card surcharge ban itself," it said in a statement, adding it was concerned about the capacity of small businesses to take on the cost.
"The ATO's own response highlights that concern," it said.
"If absorbing the cost of accepting credit card payments is not sustainable for a government agency, it is difficult to expect small businesses already operating on tight margins to simply absorb those costs themselves."
Master Builders CEO Denita Wawn said the surcharge card ban and other regulatory decisions were made "without consultation" and showed a "lack of practical understanding of the impact of decisions being made by this government".
"It's quite incredulous," she told News 24 yesterday afternoon.
"Who would want to be a small business operator in this country at the moment?"
The ABC understands business groups were frustrated by the meeting, and it was unclear who had made the decision to end credit card payments, and when.
ATO says absorbing costs 'not tenable'
In a statement on October 2, taxation commissioner Rob Heferen said the ATO "would have preferred to continue accepting credit cards" but credit card companies declined to offer a rate that was low enough.
"The costs associated with accepting credit card payments are significant, with merchant fees estimated to be almost $200 million annually and expected to continue increasing over time," he said in the statement.
"It is not tenable for the ATO to absorb the costs associated with accepting credit cards on an ongoing basis.
"This would result in less revenue being collected by the ATO and, ultimately, less funding being available for all government services."
Small business have criticised the ATO over its credit card ban.(ABC News: Nassim Khadem)
Opposition Leader Angus Taylor called for the government to "instruct" the ATO to reverse its decision.
"This is a government that says to small businesses, 'You've got to absorb the surcharges,' and then the Australian Tax Office says, 'We're not going to accept credit card payments because we can't accept the surcharges,'" Mr Taylor said.
"The hypocrisy of this government knows no bounds."
Chris Rodwell, CEO of the Australian Retail Council, also called on the tax office to rethink the decision.
"Removing credit card payments will disrupt how some small businesses manage their cash flow at an already difficult time," he said.
"Small businesses deserve a fair go. If they are expected to wear these costs, so should the tax office."
Other entities have also signalled they will stop accepting credit card payments, including StrataPay, some private schools, local councils, and rental payment platforms.
The ATO has said credit card payments make up only 2.3 per cent of payments to the tax office.
It said "more than 60 per cent of credit card payments by value were made by privately owned and wealthy groups, and public and multinational businesses", while about 5 per cent of all small businesses used credit cards to pay their taxes.
