Payment Logic Urges Albanese Government to Change ATO Payments
The payments firm proposes a third-party system for tax payments as the cost of keeping credit card payments fee-free rises.
Updated on Nov. 11, 2026 in Credit Cards
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Payment Logic has urged the Albanese government to adopt an alternative third-party system for ATO payments. The government has extended the deadline for the ATO to stop accepting credit card payments until 30 June 2027, after reversing its original decision following pressure from small businesses.
Why it matters
The company warns that the Reserve Bank's surcharge ban, which took effect on 1 October, makes card payments more attractive and raises the cost of keeping them fee-free. Estimates of that cost could substantially exceed the government's original $200 million figure.
The government's estimate of $200 million for fee-free ATO card payments compares with a possible cost above $1 billion, and the final transitional funding figure is yet to be released in the Mid-Year Economic and Fiscal Outlook. In a News24 Pulse/YouGov survey, 29 per cent of Australians supported the surcharge changes, 31 per cent opposed them and 40 per cent were undecided.
The players
Payment Logic
An Australian bill payment company whose co-CEO, Sam Plowman, has put forward a proposal for an alternative third-party tax payment system.
Jim Chalmers
Australia's Treasurer, who received a letter from Payment Logic proposing an alternative ATO payment system.
The details
Under Payment Logic's proposal, taxpayers could keep using BPAY and bank transfers without a fee. Those wanting to pay by credit card would choose an Australian-owned bill payment provider and cover the processing charge themselves, a model the company says resembles Canada's national tax agency arrangements.
Timeline
1 October: The Reserve Bank's credit card surcharge ban took effect.
30 June 2027: Extended deadline for the ATO to stop accepting credit card payments.
Market Dynamics
Payment Logic's proposal follows the model used by Canada's national tax agency, which lets taxpayers pay by credit card through third-party providers. The debate reflects how the Reserve Bank's surcharge ban has shifted the cost balance between card and non-card payments for government transactions in Australia.
Taxpayers who prefer to pay the ATO by card could face a processing charge under the proposed model, while BPAY and bank transfers would remain fee-free. The outcome affects how households and small businesses budget for tax payments before the 30 June 2027 deadline.
The takeaway
Households and small businesses should check which tax payment methods remain fee-free before the 30 June 2027 deadline. Changes to surcharging rules could shift the cost of card payments over the coming year.
What happens next
The final cost of transitional funding for ATO credit card payments is to be detailed in the Mid-Year Economic and Fiscal Outlook.
Further reading
For more on how card fees and surcharging rules affect everyday spending, see Credit Cards.
Source note: This article includes information reported by News24.
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