Australia Bans Card Surcharges: Businesses Face Higher Costs or Price Hikes

The Reserve Bank of Australia has announced that from October 1, businesses will no longer be allowed to add surcharges when customers pay with a debit or credit card. This change follows a lengthy review and decision to remove surcharging from all designated card networks, including EFTPOS, Mastercard, and Visa.

American Express is voluntarily joining the change, which affects how businesses cover the costs of accepting cards. Currently, businesses incur different fees for each type of card, ranging from 0.43 per cent for an EFTPOS debit card to about 1 per cent for Visa or Mastercard credit cards.

Businesses will have two options: absorb the remaining cost themselves or build those costs into slightly higher prices. This means customers who currently avoid surcharges by paying in cash may see price increases, especially when shopping at smaller businesses that previously applied card surcharges.