Australia Ditches Card Surcharges in Bid to Simplify Pricing

Bakery owner Dylan McQueen paid $5,785 in card fees last financial year, despite displaying signs that read 'CASH PREFERRED'. However, cash only made up 16% of his transactions.

McQueen questioned the practice of adding a surcharge to card payments, saying it was 'out of principle' and he didn't believe in it. The Reserve Bank of Australia (RBA) governor Michelle Bullock said earlier this year that surcharging no longer worked as intended and most consumers wanted it to stop.

From October 1, businesses across Australia can no longer add a surcharge to card payments, meaning a $10 sandwich will cost $10 regardless of whether it is paid for with cash or a card. The RBA estimated this change would save businesses $910 million each year.

Nursery owner Calum Haygarth said merchant fees made up 'tens of thousands' in his annual operating costs and he expected to raise prices as a result of the change. He believed it was unfair for cash customers, who would end up paying more due to the reduced margins on small items.