Why new card-payment rules may affect how owners pay their levies
OP-ED: Roland Franz examines how the RBA’s card-surcharging reforms will affect body corporate levy payments and what committees and owners should prepare for before the changes take effect.
By Roland Franz, General manager of Body Corporate Headquarters Strata Consulting Services (Qld)
The Reserve Bank of Australia’s Review of Merchant Card Payment Costs and Surcharging – Conclusions Paper outlines one of the most significant changes to Australia’s payments landscape in decades. From October 1, 2026, surcharging will be removed for debit, prepaid and credit card transactions across the designated eftpos, Mastercard and Visa networks.
The RBA’s website states that the objective of the reforms is to simplify payments, reduce interchange fee caps, improve transparency and ensure consumers face predictable, inclusive upfront pricing.
For many, this reform will feel like a welcome simplification. For bodies corporate, however, the implications are more complex. Levy collection is governed by legislation, budgets are tightly structured, and every expense must be accounted for. Removing surcharging does not remove the underlying merchant card payment costs. It simply prevents bodies corporate from passing those costs directly to owners at the point of payment.
This creates an immediate decision point for committees: whether to absorb merchant card payment costs or discontinue card-based levy payments altogether.
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How this affects levy payments
Bodies corporate commonly allow owners to pay levies using credit or debit cards through payment gateways or strata management portals. These transactions attract merchant service fees that typically range from around one to more than two percent, depending on the card type, network and provider. Historically, these fees were passed directly to owners as a surcharge. From October 1, 2026, surcharging will no longer be permitted. However, the merchant fees remain and must be absorbed by the body corporate if card payments are retained as a method of payment available to owners.
For schemes with hundreds of lots, the cost can escalate quickly. Levy budgets are calculated with precision, and any unplanned expense affects the administrative and sinking funds. If only a proportion of owners use card payments, the entire community ends up subsidising the payment choices of a few. This raises questions of fairness, budget integrity and compliance with the requirement for bodies corporate to act reasonably.
Why card payments may be discontinued
Given the financial pressures, many committees may conclude that continuing to offer card payments is no longer reasonable. Removing the option avoids budget distortion and prevents inequity among owners. In contrast, BPAY, direct debit and EFT are generally lower-cost alternatives that are reliable and already widely used.
For these reasons, and based on the approach being adopted by payment providers such as StrataPay, discontinuing card payments is likely to become the default position for many schemes.
The case for retaining card payments
Despite the challenges, there are genuine benefits to retaining card payment options.
Many owners have historically relied on credit or debit cards to pay levies, often because these methods align with personal budgeting. This can be particularly useful in times of cash-flow shortfalls where some owners may use credit cards to smooth out the bumps between pay periods or to buffer against an unexpected bill or life occurrences. Without card payment options, it may be more challenging for some owners to manage a short-term cash flow issue.
Bodies corporate already absorb certain banking and financial charges as part of normal operations. Bank fees and other financial service costs routinely appear as expense items in the administrative fund budget.
Ultimately, whether to retain card payments is a matter for each body corporate. Some committees may decide that the convenience offered to owners outweighs the additional cost. Others may consider the fees manageable within their existing budget structure.
The body corporate manager’s role
Your body corporate management firm may, if it has not already, write to your committee seeking instructions on how your scheme intends to respond to the RBA reforms.
Approaches may vary between management firms. Some consider that the decision should be made by owners at a general meeting, while others consider that the committee can make an initial decision that may later be ratified or amended at a general meeting.
Ultimately the body corporate will need to make a clear decision: either it continues to allow card payments and absorbs all associated merchant card payment costs, or it removes card payment options entirely. If the committee does not provide instructions, your management firm may (but for compliance purposes should) adopt a default position that card payments will no longer be offered.
Read more from Roland Franz HERE
What owners should prepare for
Owners who currently rely on card payments to pay levies should expect that changes may occur. In many schemes, card payments may be phased out before or when the RBA reforms take effect. Owners should prepare to transition to BPAY, direct debit or electronic funds transfer (EFT).
Removing card payments does not change levy due dates or the obligation to pay levies on time.
Owners should review their personal budgeting arrangements to ensure payments continue smoothly and that levies are paid in full by the due date. Otherwise, depending on the scheme’s financial arrangements, a discount may be lost or a late-payment penalty incurred.
Owners are advised to make the necessary adjustments to their preferred payment method before their next levy is due to avoid unnecessary costs.
Disclaimer: This opinion article is provided for general information only and does not constitute legal, financial or professional advice. The views expressed are those of the author. Payment regulations, fees and implementation arrangements may change, so readers should consult official RBA information and seek advice relevant to their circumstances.
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