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# Small businesses fight for time before tax office bans credit cards
- URL: https://www.bushletter.com/ato-calls-forum-after-credit-card-ban-stirs-small-business-pushback/
- Published: 2026-10-07T06:30:00.000Z
- Updated: 2026-10-13T08:47:06.000Z
- Description: The Tax Commissioner called a snap meeting with more than 20 business groups after the ATO blamed its decision on almost $200m in annual fees.
- Author: Bushletter Newsroom
- Tags: Business, Australia, Australian Taxation Office

TLDR

The Australian Taxation Office will stop accepting credit card payments after 30 November 2026, citing nearly $200 million in annual merchant fees. Tax Commissioner Rob Heferen convened an emergency forum with more than 20 business groups, where small business representatives demanded flexible transition arrangements and no penalties.

## The forum

Tax Commissioner Rob Heferen convened a special forum of the ATO's Small Business Stewardship Group shortly after the announcement, pulling together more than 20 peak bodies including the Australian Chamber of Commerce and Industry and the Council of Small Business Organisations Australia (COSBOA).[\[1\]](https://www.ato.gov.au/media-centre/ato-to-stop-accepting-credit-cards-after-30-november-2026?ref=bushletter.com) The meeting came directly from industry concern about the timeline and what the cut-off would do to business cash flow.

COSBOA CEO Skye Cappuccio made the sector's position clear. "This change comes at a pressured time for small businesses, with many already managing high costs, tight margins and competing financial obligations," Cappuccio said.[\[4\]](https://cosboa.org.au/post/ato-credit-card-change-adds-cash-flow-pressure-for-small-business/?ref=bushletter.com) Cappuccio's organisation wants a commitment that businesses acting in good faith face no penalties during the shift. "Businesses acting in good faith should be given reasonable flexibility to transition to another payment method without unnecessary disruption or penalties," she said.

## Why the ATO pulled the plug

Merchant fees on credit card payments cost the ATO almost $200 million a year, a figure the office expects to keep rising.[\[1\]](https://www.ato.gov.au/media-centre/ato-to-stop-accepting-credit-cards-after-30-november-2026?ref=bushletter.com) Heferen said the office approached card schemes seeking a lower rate and found no takers. "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," Heferen said.

The regulatory environment sealed the decision. The Reserve Bank of Australia banned surcharges on credit, debit and prepaid cards from 1 October 2026, removing the mechanism the ATO had previously used to pass merchant costs on to card users.[\[2\]](https://www.rba.gov.au/media-releases/2026/mr-26-10.html?ref=bushletter.com) With surcharging gone and card schemes holding firm on fees, the ATO's arithmetic no longer worked. Treasurer Jim Chalmers said the surcharge ban would save consumers $1.6 billion in card surcharges and save businesses $910 million each year.

## What actually changes and for whom

About 5 per cent of all small businesses used credit cards to pay their taxes, the ATO said, a modest share that nonetheless covers a meaningful cohort of operators who have built credit card payments into their liquidity planning.[\[1\]](https://www.ato.gov.au/media-centre/ato-to-stop-accepting-credit-cards-after-30-november-2026?ref=bushletter.com) Credit cards have traditionally offered a cash-flow advantage: the business pays today's tax bill but settles the card statement weeks later, preserving working capital through tight periods. That buffer disappears with the ban.

Alternative payment channels remain open. BPAY, direct debit and direct credit (EFT) all stay available, and taxpayers can still pay by mail or at Australia Post outlets.[\[3\]](https://caat-p-001.sitecorecontenthub.cloud/api/public/content/65f4d883-18ca-4ffd-9943-76ea6f974d91%5F89cd3737%5F9595%5F4890%5Fa520%5F71d817dfb1f4%5Fpdf?ref=bushletter.com) For the 5 per cent of small businesses that relied on credit cards, the gap is a timing question as much as a method question: BPAY and direct debit draw funds immediately or within days, which is not how a rolling credit card limit behaves.

## The pressure on the transition

Business groups are not disputing the ATO's fee arithmetic. Forum discussion centred on the pace and terms of the changeover, with peak bodies asking for a clear commitment that operators who are slow to switch will not face compliance consequences during the adjustment window.[\[4\]](https://cosboa.org.au/post/ato-credit-card-change-adds-cash-flow-pressure-for-small-business/?ref=bushletter.com) The ATO has set 30 November 2026 as the cut-off, giving businesses about two months from the 1 October announcement to change their payment arrangements.

Whether that timetable feels tight depends almost entirely on the business. A sole trader paying a quarterly BAS by card needs to change one habit; a business with complex payment schedules and integrated accounting software may need system changes. The stewardship group is expected to meet again before the deadline, with the ATO indicating it will publish further guidance on the transition through its media centre.

KEY TAKEAWAYS

01Credit card payments to the ATO will be cut off after 30 November 2026, affecting the roughly 5 per cent of small businesses that pay their tax by card.

02Annual merchant fees of almost $200 million drove the decision, with card schemes unwilling to lower their rates.

03COSBOA CEO Skye Cappuccio called for flexibility and no penalties during the transition to alternative payment methods.

04BPAY, direct debit and EFT remain available, but business groups warn the shift disrupts established cash-flow management.

05The RBA's ban on card surcharges from 1 October 2026 removed the ATO's ability to pass merchant costs on to card users.

SOURCES & CITATIONS

1. [ATO to stop accepting credit cards after 30 November 2026](https://www.ato.gov.au/media-centre/ato-to-stop-accepting-credit-cards-after-30-november-2026?ref=bushletter.com)
2. [RBA media release on card surcharge ban](https://www.rba.gov.au/media-releases/2026/mr-26-10.html?ref=bushletter.com)
3. [ATO payment options guidance document](https://caat-p-001.sitecorecontenthub.cloud/api/public/content/65f4d883-18ca-4ffd-9943-76ea6f974d91%5F89cd3737%5F9595%5F4890%5Fa520%5F71d817dfb1f4%5Fpdf?ref=bushletter.com)
4. [COSBOA statement: ATO credit card change adds cash-flow pressure for small business](https://cosboa.org.au/post/ato-credit-card-change-adds-cash-flow-pressure-for-small-business/?ref=bushletter.com)

FREQUENTLY ASKED QUESTIONS

When does the ATO stop accepting credit card payments?

After 30 November 2026\. Credit card payments made on or before that date will still be accepted.

What payment methods can I use instead?

BPAY, direct debit, direct credit (EFT), payments by mail and payments at Australia Post outlets all remain available.

Why did the ATO make this change?

Merchant fees cost the ATO almost $200 million a year. The RBA's ban on card surcharges from 1 October 2026 also removed the ATO's ability to pass those costs on to card users, making the existing arrangement financially unsustainable.

Will small businesses be penalised if they are slow to switch?

COSBOA has publicly called for flexibility and no penalties during the transition. The ATO has not yet issued a formal commitment on this point; further guidance is expected before the deadline.