Preparing for the End of Card Surcharges: A Strategic Guide for Property Managers

The Reserve Bank of Australia has made significant changes to the Australian card payments regime which will take effect from 1 October 2026. This presents Homhero clients with a unique opportunity to take a fresh look at the fees charged to guests, as well as re-evaluate their payment gateway options (with Hompay as a new alternative).

The end of card surcharges isn’t just a compliance update, it’s an opportunity to overhaul your pricing strategy and revenue streams. Read on to see how Homhero is handling the transition, and grab our step-by-step preparation checklist at the end of this article.

What are the changes?

From 1 October 2026 onwards, payment surcharges on Visa, Mastercard and Eftpos transactions will no longer be permitted.  When you buy your morning coffee or when a guest books on your website, the published price must be the final price. No unexpected payment surcharges can be added at checkout.  

Whilst the new regulations do not cover American Express or AfterPay, both companies say that they will enforce a “no surcharge” policy with their merchants.

How will clients and bookings be affected?

All Homhero clients will be affected by this change. Therefore, the relevant settings and algorithms in Homhero will be modified as follows:

1. For website or direct bookings processed via your payment gateway – the Homhero booking form and the direct booking function (+ Create / Guest Booking) will have all surcharge calculations and wording removed
2. For bookings received via Booking.com (“BDC”) and VRBO – the price passed to BDC or VRBO will be the sum of the tariff, packages and the OTA mark-up.  There will be no inclusion of a payment surcharge in the total figure
3. For Google Vacation Rental bookings – these pass through to either your website or BDC or VRBO, and will therefore be treated in the manner described above

For Airbnb and Homes & Villas by Marriott (HVBM) – no changes will be needed as Airbnb and HVBM already absorb any payment surcharges, and that practice will continue.

What are the overall financial implications of this change?

For a Property Manager that has payment charges averaging, say, 1.65% incl GST and management commissions averaging, say, 16.5% incl GST, if the payment charges are absorbed by the PM, the gross profit margin on bookings will reduce by 10% – a significant overnight reduction if no action is taken.

On the other hand, if the owner absorbs the charges during a transition phase, the reduction in expected earnings from a booking will be 1.98% – much less of an impact than if the PM is to absorb the charges.

Options to minimise the impacts of this change

To minimise the financial impact to your PM business, your options include the following:

1. Pass on the payment surcharges to the property owner
2. Renegotiate your current payment gateway agreement
3. Use the Packages tool in Homhero to do a refresh of your booking fees, guest service charges, damage waivers and other charges
4. Utilise the batch processing scripts that Homhero can run on your request (read on for further details regarding this)

As discussed below, our advice is that owners can be fairly asked to absorb the surcharges in relation to pre 1 October bookings, but thereafter, a combination of repricing your current gateway and the Packages tool should be used to refresh the way you charge guests.

How will specific bookings be affected?

The various booking types will each be affected in different ways, which are as follows:

BDC bookings that use a VCC and have payments due after 1 October 2026

If a BDC booking has a VCC attached to it, the guest will have been quoted a booking value that includes a VCC payment surcharge on the full value of the booking.  

Because of how a VCC works, any payment that falls after 1 October will be paid to you at the full value that you expected to receive.  You will not have to absorb any surcharge.

BDC bookings that do not use a VCC and have payments due after 1 October 2026

At the time of booking, all BDC guests are quoted a booking value that includes the full value of payment surcharges, assuming that the guest will make all payments at the highest merchant fee rate that is set up in your Homhero configuration.

For these bookings, Homhero can run a script on your request that allocates any remaining payment surcharge to a “General Reserve” that would be set up as a new Sundry item.  

At the same time, the “General Reserve” will be inserted as a new Package in the reservation window, so that when any Balance Owing schedule is sent to the guest (after 1 October), the correct balance owing will be shown.

The General Reserve can then be used to pay the payment surcharges. 

If guests query this treatment, you will be able to refer them to the total value of the booking – quoted to them by BDC at the time of booking.  The total booking value figure is captured in the “Internal Notes” of a BDC booking – visible in the reservation window within Homhero.

VRBO bookings that have payments due after 1 October 2026

As with BDC, at the time of booking, all VRBO guests are quoted a booking value that includes the full value of payment surcharges, assuming that the guest will make all payments at the highest merchant fee rate.

As a result, for these bookings, on your request we can run the same script to allocate any remaining payment surcharge to the “General Reserve”, to be used to pay the payment surcharges.

If guests query this treatment, you will be able to refer them to the total value of the booking, quoted to them by VRBO at the time of booking.  Unlike with a BDC booking, the total booking value is not captured in the “Internal Notes” of a VRBO booking.  The guest will however have that figure from their correspondence with VRBO at the time the booking was made.

Direct and website bookings that have payments due after 1 October 2026

You should check your schedules and templates in Homhero, but generally speaking, these guests will NOT have been quoted a booking value inclusive of the full value of payment surcharges.  They will have only paid the payment surcharges applicable to their deposit.

If your schedules have been silent on the surcharges for the balance payment, because the Reserve Bank of Australia has forced this change upon the industry, it would be fair to pass the residual surcharge on to your owners by way of a reduction in the Tariff.  Legally, you are the agent in relation to the collection of payments, so you are within your rights to pass on this cost to the owner.  It will also be for a limited number of bookings during a transition phase.

If you wish to adopt this approach, on your request Homhero will run a script to move the value of any remaining payment surcharge from the Tariff to a “General Reserve” that is set up as a new Sundry item.  The amount will be calculated based on the highest merchant rate that is set up in your Homhero configuration.

The General Reserve will be treated as a new Package in the reservation window and can be used to pay the payment surcharges.

Renegotiate your payment gateway fees, or consider Hompay

As a good business practice, it is advisable to review the cost of your payment gateway from time to time. You should ask your provider to review your latest transactions and advise if a more competitive fee structure can be offered.

In anticipation of this change, Homhero has recently released Hompay as a competitive payment option for clients.  Hompay is fully integrated into Homhero and has the following key benefits for Homhero clients:

• 3DS2 included for free – all payments processed online via Hompay include free 3DS2 security, helping to protect you from credit card fraud and chargebacks
• View transactions, settlements and chargebacks – a complete history of guest payments via Hompay, settlements from Hompay, and any chargebacks can be displayed within the Reports section of Homhero.  There is no need to login to a separate interface
• Process refunds – a guest refund can be processed from within the reservation window in Homhero, and will be automatically paid back to the selected credit or debit card
• Competitive rates – we have partnered with Kovena to provide you with competitive rates.  Please contact us if you wish to find out what rates Hompay can offer, or simply register your interest online.

Please also note that clients who switch to Hompay can go live on a “no surcharge” basis, even if that is before 1 October 2026.  You will need to have your mix of fees refreshed beforehand as the booking value will not include a payment surcharge.  It will need to be paid by you or the property owner.

Use the Packages tool in Homhero to refresh your booking fees, guest service charges, damage waivers and other charges

Our step-by-step help article explains the many ways to set up Packages in Homhero. You can use this tool to configure the following charges (amongst others):

• Booking fees – either a once-off fee of say $50 or a length of stay fee, for example $55 for 2 nights and $10 for each night thereafter
• Damage waiver fee – generally a length of stay fee of between $10 – $20 per night.  This money is pooled by the agency and used to instantly pay for damage events up to a certain limit (say $500)
• A platform fee – generally a % fee that applies to all bookings (OTA, website and direct bookings), and is used by many clients to recoup their software systems and general administration costs (which would now include payment collection) 
• A website / direct booking fee – as the costs of SEO, GEO, Google AdWords, Meta advertising and website maintenance increase, many clients charge a fee of between 5.5% – 10% on their website and direct bookings.  This fee is set up in Packages and flows to the PM as a new revenue stream.  It also creates a great incentive to focus on generating more direct bookings – where you have total control over the client and any bond claim issues.  Whatever markup is used, it is important to ensure that the “book direct” rates on your website are below the rates that will be seen on Airbnb, Booking.com or VRBO / Stayz.  Owners will generally expect that your website is cheaper than other channels.

If any new fees are introduced, please also be aware of these two considerations:

1. The advertised price to a guest must be inclusive of any fees and charges at the time of booking. Extra fees cannot be a surprise upon checkout.  There is a setting in the Packages tool that allows you to ensure that a package is NOT itemised separately.  It is probably best to use this for all fees and charges other than perhaps your booking fee or a cleaning fee.
2. It is very important to consider how you will message this to your owners, especially if they notice that the “book direct” rates have increased.  The introduction of the “no surcharge” regime provides a very valid rationale for restructuring your fee mix, to give you the ability to absorb the payment surcharges that would otherwise have to be passed on to your owners.

A handy checklist

Don’t wait until the deadline hits. Work through this step-by-step preparation checklist to ensure your systems, legal agreements and owner communications are completely ready before October 1.