Australian Government delays ATO credit card payment ban

The Australian government has announced a delay to the Australian Taxation Office (ATO) plan to stop accepting credit card payments. Originally intended to take effect sooner, the transition period has been extended until June 30, 2027.

The decision follows significant backlash from small businesses concerned about managing cash flow. The ATO had previously moved to ban credit card payments because it could not absorb the high processing fees, especially following the Reserve Bank of Australia’s decision regarding credit card surcharges. While the ATO explored negotiating lower fees with credit card companies, those offers were deemed insufficient to maintain the current practice.

To facilitate this extension, the government will provide additional funding to the ATO, the costs of which will be included in the December budget update. Following the June 2027 deadline, the ATO intends to continue accepting credit card payments through third parties or other low-fee methods such as debit cards and bank transfers. The government stated it will consult on targeted options to support taxpayers and businesses experiencing financial hardship during this transition.