The change forms part of broader payment system reforms being introduced by the Reserve Bank of Australia, including reduction to interchange fees on many card transactions.
What does this mean for pharmacies?
While pharmacies are unable to apply surcharges on PBS prescriptions, if your pharmacy does apply surcharges on eligible items to recover payment processing costs then you will no longer be able to do so from October 1 2026.
At the same time, interchange fees on card transactions will reduce. Whether your pharmacy will receive the benefits of reduced interchange fees will depend on the type of merchant agreement you have with your bank or payment service provider.
Check your merchant agreement
It is advisable that pharmacies review their merchant service fee agreements as soon as possible.
If you are on a flat-rate or blended pricing arrangement:
- Your merchant fees may not automatically reduce on October 1.
- You should contact your bank or payment service provider to determine whether lower interchange costs will be reflected in your pricing.
- Consider negotiating your rates, particularly if your rates are due for renewal.
If you are on a Interchange plus (Interchange ++) arrangement, including least-cost routing:
- Lower interchange fees should be automatically passed on through to your merchant service fees.
Alternative payment options
Pharmacies may continue to offer discounts for non-card payment methods, such as cash or an eligible account-to-account payment option. These discounts are separate from card surcharges and will not be affected by the surcharge ban.
The PGA will provide further information to Members as practical and cost-effective non-card payment solutions become available.
