Surcharging is closing off in the UK and Australia and opening up in the US. Two merchants explain why the quickest saving is often in the acquirer invoice, and why steering works best as an offer.

Card fees are one of the few costs most merchants cannot avoid. Shoppers expect to pay by card or wallet, and every payment carries interchange, scheme and processing fees. As a result, card acceptance costs have become a board-level line item for many retailers. The rules on passing those costs to customers are also changing fast.

So we asked industry leaders one question: how are merchants managing rising card acceptance costs, and is steering customers to cheaper payment methods working? We wanted real numbers over general advice. Two respondents answered, both from the merchant side. Below, we set their replies against regulatory changes in three markets.

Where card acceptance costs stand

Regulators are tackling card acceptance costs in three different ways. In Australia, the Reserve Bank ended surcharging on debit and credit cards from 1 October 2026 and lowered interchange caps from the same date, according to its conclusions paper. Card networks and large acquirers must also publish their fees. In the RBA’s research, 76% of consumers wanted surcharging to end.

The US is moving the other way on card acceptance costs. A revised settlement between Visa, Mastercard and merchants would cut credit interchange by 10 basis points for five years and cap standard consumer credit rates at 1.25% for eight years, Retail Systems reported. It would also let merchants surcharge up to 3% and decline premium cards. However, it still needs court approval.

In the UK, the Payment Systems Regulator found that the market for scheme and processing fees is not working well. Its remedies on card acceptance costs focus on transparency rather than caps, which the British Retail Consortium says will not go far enough. Meanwhile, a consultation on capping cross-border card fees between the UK and EU is expected in late 2026 or 2027.

Audit before you switch

Our first respondent advises Shopify merchants on preparing for a sale and previously built and sold an Australian retailer. He argued that the quickest cut to card acceptance costs is often already sitting in the invoice.

“Audit your existing acquirer before you change them. The biggest saving on card costs is often already sitting in your invoices. One enterprise retailer I know found incorrect debit and credit interchange rates were being applied to 10% of its transactions. That led to a six-figure refund and a multi-million-dollar saving a year, without changing acquirer. A small error on thousands of transactions adds up.

I look for transactions in the wrong category, debit cards charged at credit card rates, the wrong volume bands, and rates that haven’t been updated as volumes grew. Get the last three months of invoices from your processor and run them against your order management system. Work out the total cost of each successful transaction, not just the merchant service fee, then break it down by card scheme, debit versus credit, domestic versus international, card present versus not present, and transaction type.

With that data, you can negotiate with your current acquirer and ask for a rebate on past errors. If you switch before doing this, you lose the audit trail and jump out of the frying pan into the fire.

Wallets are a conversion tool, not a cheaper payment method. Most wallet payments still run on a card behind the scenes, and many of my clients are paying premium credit card fees on what they think are wallet transactions. Look at the conversion rate and average order value for each method. If a method lifts conversion, it can be worth it even at the same cost. If you want to cut card costs, look at bank transfer payments.”

John Mac, Founder, Exit Evidence

His audit method is the strongest practical advice on card acceptance costs we received. Many merchants pay on blended or tiered pricing, which hides what each card type adds to their card acceptance costs. Therefore, breaking costs down by card type and channel shows where errors hide. His retailer example is his own observation and could not be checked, but the method applies at any size.

His point on wallets needs one note. Apple Pay and Google Pay pass through whichever card sits behind them, which may be a debit card. PayPal can also be funded from a bank account or balance. Still, most wallet payments carry card fees, so wallets rarely cut card acceptance costs on their own. Their value is in conversion.

Steering as an offer, not a penalty

Our second respondent runs an international apparel business that sells to companies. He explained why surcharging is not an option in the UK and how he thinks about steering.

“Card surcharging on consumer payments is banned in the UK, so it isn’t something we can use. Business cards are an exception, but any surcharge can’t be more than the cost of accepting that payment method.

Nudging customers can work for some businesses, as long as the alternative isn’t presented as a punishment for using cards. Business customers placing large orders, for example, may not mind being offered bank transfer alongside cards. I don’t surcharge myself. We sell to businesses in many countries, and I accept card fees as the cost of doing business online. An unexpected fee could put customers off completing their order, and that would cost me far more than the card fees.”

Conor Smart, Director, Arklavo

His facts on the UK are right. The UK has banned surcharges on consumer card and PayPal payments since 13 January 2018. His point about lost sales matters too. A merchant that cuts card acceptance costs but loses orders at checkout has saved nothing.

Bank payments are the main alternative for cutting card acceptance costs. Pay by bank moves money directly between accounts without card fees, as our explainer on pay by bank describes. Card networks are also building their own account-to-account services, as our report on Visa A2A showed. For business buyers, faster transfers are making large orders easier to settle without cards, as our piece on Stripe’s instant B2B transfers found.

What works on card acceptance costs

Taken together, the answers point to a clear order of work. First, audit three months of acquirer invoices and check every transaction is in the right category. Next, negotiate with your current acquirer using that data before switching. Then measure the conversion rate and order value for each payment method, not just its fee. Finally, offer cheaper methods such as bank payments as an option, especially for large business orders, rather than penalising card users.

What to watch next

Several decisions will shape card acceptance costs in 2027. In the US, the court ruling on the Visa and Mastercard settlement will decide whether surcharging and premium card refusal become widespread. Australian merchants will see whether lower interchange makes up for the end of surcharges. Meanwhile, the UK cross-border fee cap consultation will test how far regulators are willing to go.

Above all, our respondents agree on one point. The cheapest fee is the one your acquirer never overcharged. Audit first, steer gently, and judge every payment method by the sales it brings in, not just the fee it carries.

FintechBits covers payments, banking and fintech developments for readers in the US and UK. This article is for information only and is not financial advice. Views expressed are those of the FintechBits editorial team.