Surcharges Banned: Aussie Businesses to Absorb Card Payment Costs

A ban on card payment surcharges is set to take effect in Australia from October 1, and businesses are already bracing for the impact. The change applies to all electronic transactions, including EFTPOS, Visa, Mastercard, American Express, JCB, and UnionPay.

For small trades and service providers, the cost of accepting card payments can be substantial, especially when customers opt to pay large invoices by credit card to collect rewards points. One electrical company owner noted that in some cases, they have to pay up to $200 in processing fees for a single transaction, as customers choose to earn rewards points.

While some businesses may absorb the cost without changing their pricing, others may need to review their prices across the board to recover previously charged fees. This could potentially lead to higher costs being shared by all customers, including those paying with cash or direct transfer.

At least one body corporate manager has reportedly advised owners that they will remove credit card payment options rather than absorb merchant fees from shared funds. The reform is expected to lower interchange fee caps from 0.8 per cent to 0.3 per cent, but businesses are concerned about the actual costs imposed by their own payment providers.