Surcharge Ban Hits Small Businesses Hard: Higher Prices Loom for Consumers

Australia's new card surcharge ban has taken effect, eliminating extra checkout fees on retail purchases. 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 the ban would make it difficult for his business to absorb card fees, warning that higher prices could eat into shoppers' savings. 'It's absolutely not savings because the bank charges are still there,' he said. 'So either I absorb it and I go broke, or I pass it on.'

The Reserve Bank estimates consumers will 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.