Sick of paying fees just to pay your bills? Here’s every legal way to beat the surcharge

You have just opened your electricity bill. You have done the right thing – paid it on time, logged in to your online account, and found the payment screen. And there, staring back at you, is a surcharge. For using your credit card. For using PayPal. Sometimes, remarkably, even for using BPAY.

“Inflicting a charge for paying any bill should be illegal,” wrote one frustrated reader on the Choice community forum recently. “Banks make profit like highway robbers.”

Another agreed: “The government should make firms offer BSB payment options as well as direct debit. The consumer should be able to choose the payment method, rather than being forced into direct debits.”

They are not alone. Payment surcharges have become one of the most reliably infuriating parts of modern bill-paying life – and for Australians on fixed incomes or tight retirement budgets, being charged extra simply to pay what you already owe feels, frankly, insulting.

Here is the good news: for most bills, there is a fee-free option. You just need to know where to look.

First, who is actually charging you — and why?

Before we get to solutions, it is worth understanding the mechanics. As one Choice forum contributor noted, in most cases it is not the bank charging you the surcharge – it is the business. Businesses are permitted to pass on their card processing costs to customers, and some do so very aggressively.

Credit cards are the most expensive to process – particularly American Express, which carries merchant fees of around 1.5 per cent – which is why many billers charge more for Amex than Visa or Mastercard. Debit cards cost less to process. Bank transfers cost almost nothing.

The implication is clear: the further you are from cash or a direct bank transfer, the more it typically costs you.

Method 1: BPAY from a cheque or savings account – almost always free

BPAY has been available through Australian banks since 1997 and is now accepted by over 55,000 businesses including most utilities, insurance providers, telecoms companies and councils.  BPAY is free to use via internet banking.

The key word is “via internet banking” – and the crucial distinction is what account you pay from. There is no charge to make a payment via BPAY from a cheque or savings account – but some billers do charge if you use a credit card to make a BPAY payment. So if you are paying via BPAY, always select your everyday transaction account or savings account as the source, not your credit card.

To use BPAY, look for the BPAY logo, biller code and customer reference number on your bill, log onto your online or mobile banking, select the BPAY or bill payment option, enter the biller code and reference number, payment amount and payment date, and pay. That is it. For most household bills – power, gas, water, rates, insurance, phone, internet – this is your simplest fee-free option.

One important note: BPAY View – the service that allowed your bills to arrive directly in your internet banking – was discontinued. From 27 March 2026 you could no longer register new billers, and from 31 May 2026 all existing BPAY View billers will be deactivated.  This does not affect standard BPAY payments – only the bill delivery service. You can still pay via BPAY as normal; you will simply receive your bills by the biller’s standard method (email or post) rather than through your banking app.

Method 2: Direct debit from a bank account – set and forget

Setting up direct debit from a bank account – not a credit card – avoids fees for most billers. Direct debit means the company pulls the money from your nominated account automatically on the due date. You do not have to remember to pay, you do not miss a due date, and for most billers it is completely free when linked to a cheque or savings account.

Direct debit is an agreement that allows a company to automatically debit your account on a recurring basis. It is a contract between you and the company – the bank facilitates the transfer. This means any changes to the amount or the arrangement need to be made directly with the biller, not the bank.

The limitation is control – with direct debit, you are trusting the company to debit the correct amount. For bills that vary significantly from month to month, some people prefer the manual control of BPAY. For fixed bills like insurance, gym memberships or subscriptions, direct debit is usually the more convenient option.

Method 3: Electronic funds transfer (EFT) / bank transfer

For billers that accept it, a direct bank transfer – using the biller’s BSB and account number, with your reference number in the description – is free at most Australian banks and carries no surcharge from the biller.

The frustration that Choice readers have raised is that many billers do not make this option easy to find, or do not offer it at all, preferring to push customers toward card payments that generate surcharge revenue. If your bill does not display bank transfer details, it is worth calling the company directly and asking whether an EFT option is available.

Method 4: Australia Post – with important conditions

Paying over the counter at Australia Post by cash or cheque avoids processing fees for most utility bills. However, there is an over-the-counter fee of $2.10 when you pay in person at Australia Post – though you are exempt from this fee if you are a concession card holder, a residential customer aged 65 or over, or if you are experiencing financial hardship.

This means for most Starts at 60 readers who are 65 or older, in-person payment at Australia Post remains a genuinely fee-free option for utility bills – and for those who are not comfortable with online banking, it is a practical and accessible alternative.

Method 5: Phone banking

BPAY payments can be made via phone banking – useful for those who prefer not to use a computer or smartphone but want the fee advantages of BPAY. Call your bank’s phone banking line, have your biller code and customer reference number from your bill ready, and make the payment the same way you would online.

The methods that will almost always cost you

Credit cards used to manually pay a bill – not via direct debit – will typically attract a surcharge from the biller. PayPal is frequently surcharged. American Express carries the highest merchant fees and is almost always the most expensive option. And some billers – internet service providers in particular – now charge a fee for paper bills on top of payment surcharges, which compounds the cost significantly.

The frustration on community forums reflect what many Australians feel: that surcharging for bill payment has become a quiet and largely unregulated revenue stream for large companies, at the expense of people who have no practical alternative.

As one reader laid out with pointed clarity, a hypothetical billing system where you pay $105 via American Express, $103 via Visa, $102 via BPAY, $101 via EFTPOS and $100 via direct debit from a bank account might technically reflect actual costs – but creates what they accurately called “a confusopoly for the customer.”

The practical takeaway is simple: for almost every household bill you pay, there is a fee-free option. BPAY from your transaction account, direct debit from a bank account, or EFT where accepted will avoid the surcharge in the vast majority of cases. The effort of switching is a one-time inconvenience. The saving, across every bill you pay for the rest of your retirement, is real money.

Community comments sourced from the Choice Australia consumer forum. This article is general in nature — payment options and surcharges vary by biller. Always check with your provider for the fee-free options available on your specific account.