The tax office will end credit card payments from December, declining to spread merchant fees across taxpayers as surcharge restrictions and revised interchange rates reshape payment costs. Will other government agencies follow?

As the surcharge “ban” comes into effect today, Visa and Mastercard have unveiled hefty hikes to their credit card fees for large and mid-sized merchants in an effort to claw back interchange losses for the issuing banks. Visa’s rates show it’s also targeting Australian governments and the education sector in the price increases, while Australia Payments Plus missed the publication deadline for its new eftpos rates altogether.

Flywire is switching off card surcharges for Australian hotel clients like Hamilton Island ahead of Thursday's ban, but its hospitality sales chief says guests will pay for the card fees in other ways.