Australia Scraps Card Payment Fees: But What's the Real Cost?

Australia's new surcharge ban takes effect on October 1, eliminating card payment fees from EFTPOS, Mastercard, Visa, American Express, UnionPay, and PayPal transactions. Accountant Pete Burrows welcomes this step towards pricing transparency but warns that the real cost of card payments won't disappear.

The ban is aimed at making businesses honest in their pricing, as explained by Pete: 'So all things being equal, yes, prices should go down. Not convinced it'll stay that way forever though.'

Prior to this change, card surcharges varied widely among businesses, leaving consumers wondering where these extra costs were coming from. According to Pete, the Reserve Bank of Australia's move is a transparency measure, echoing the shift when GST was folded into displayed prices.

The real cost of processing card payments still exists and will be absorbed by businesses or passed on to customers in other ways. This might mean that instead of being itemized at checkout, these costs are quietly incorporated into listed prices. Pete estimates a household spending $500,000 a year entirely on card could lose $500 a year for using their own funds.