Card Surcharges Banned from October 1: What Changes Are Coming to the Checkout?

From October 1, businesses in Australia will no longer be allowed to add a surcharge when customers pay with a debit or credit card. This change follows a lengthy review by the Reserve Bank of Australia and is expected to affect around 16% of businesses that currently apply card surcharges.

The Australian Restaurant and Cafe Association has warned that many small businesses are unprepared for this change, which could result in higher prices for customers who pay with cards.

Currently, every time a business accepts a card payment, it incurs costs ranging from 0.43% for EFTPOS debit cards to around 1% for Visa or Mastercard credit cards. Without the ability to add a surcharge, businesses will have to absorb these costs themselves or build them into slightly higher prices.

The Reserve Bank estimates that removing card surcharges could reduce wholesale payment costs for businesses by about $910 million per year. However, the impact on consumers is likely to be small, with an estimated 0.1% increase in measured inflation.