The Reserve Bank of Australia (RBA) has implemented a ban on businesses adding surcharges for credit or debit card payments, a move aimed at increasing transparency. Effective October 1, the policy has left small business owners in New South Wales struggling to cover the cost of merchant fees, which remain unchanged despite the removal of surcharges.
Philip Barbaro, owner of a Sydney cafe, revealed that his business incurs approximately $150,000 annually in merchant fees. To offset this cost, he has raised prices on select menu items, though he has kept coffee prices unchanged due to competitive market pressures. Barbaro is now considering offering discounts for cash payments, citing the old adage that 'cash is king.'
Chris Skuce, owner of the Jamaican Patty Bakehouse, has been absorbing the cost of bank fees to maintain affordable prices. However, he plans to increase prices in the new year, stating that the RBA's policy change is 'another hit to the bottom line.' Skuce argues that most customers prefer card payments, making cash discounts impractical.
Paul Nicolaou, executive director of Business Sydney, emphasized the broader economic challenges, including rising interest rates and energy costs. He criticized the banks for not addressing merchant fees, questioning the necessity of such charges in an increasingly digital payment landscape. The Australian Competition & Consumer Commission (ACCC) advised businesses to clearly disclose any price changes or discounts related to payment methods.