The Australian government knew in July that the ATO was considering refusing to accept credit card payments for tax obligations, Treasury said in a statement, three months before the ban was publicly announced on 1 October. The ATO formally decided in late September to stop accepting credit cards, with a two-month transition period.
The government has since agreed to fund the ATO's continued acceptance of credit card payments through to 30 June 2027, with final costs to be determined in the mid-year budget update. Assistant Treasurer Daniel Mulino said ATO negotiations with credit card companies improved the offer made to the agency but not to a level that would allow ongoing acceptance. He said retaining credit card payments indefinitely would carry significant fiscal costs for the budget.
The decision followed the RBA's ban on card surcharges, which took effect in October and prompted government agencies to reconsider how they would manage payment-processing costs. Credit card usage at the ATO in FY25 was low, with individuals using that method accounting for just over 2% and small businesses around 5%, Treasury said. The government said a transition period to phase out ATO credit card acceptance remains the intended approach and that the extended period will allow further engagement with small businesses.
Business groups criticised the handling of the ban. Andrew McKellar, chief executive of the Australian Chamber of Commerce and Industry, told SmartCompany the policymaking was deficient and had taken small business for granted, calling for such an approach not to be repeated. Shadow treasurer Tim Wilson said small businesses should not be learning about decisions of this kind through press reports.
Small businesses and individuals who pay tax by credit card may continue to do so directly through the ATO until 30 June 2027, after which only third-party credit card payment options will remain available alongside debit card and bank transfer. The ATO will consult with businesses and individuals currently reliant on credit card payments to identify alternative arrangements and targeted support for those unable to use other payment methods.
Official statements: Treasury
Reporting: SmartCompany
Written by Pick & Scroll News from the reporting and documents linked above.
