Card surcharge gone, coffee bill up: Perth cafes lift prices as businesses challenge ban’s savings
Australia has implemented a ban on card surcharges, intended to save consumers money, but many small businesses are responding by raising base prices to cover processing costs. Cafe owners argue that the ban forces them to pass on costs to all customers rather than just those using cards.
Why it matters
The situation illustrates the unintended consequences of regulatory intervention in payment processing and the ongoing struggle of small businesses to manage rising operational costs.
Australia’s sweeping card surcharge ban has scrapped extra checkout fees on retail purchases, including coffees, clothes and groceries, with businesses warning higher prices could eat into shoppers’ savings. Thursday’s ban covers Visa, Mastercard, eftpos and American Express payments. The Reserve Bank of Australia estimates consumers paid $1.6 billion a year in surcharges on Visa, Mastercard and eftpos. Bayswater cafe owner Rob Strahan said absorbing card fees would threaten The Oarhouse, which he runs with his wife Nic on the Swan River. “It’s absolutely not savings because the bank charges are still there. So either I absorb it and I go broke, or I pass it on,” he said. The Reserve Bank expects shoppers to pay less overall as lower processing costs flow through to prices. It forecasts about $910 million in annual reductions in merchants’ costs once domestic and foreign-card fee changes are in place.
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