Businesses will no longer be able to charge customers for using a debit or credit card from next week, in a move set to save Australians $1.6 billion a year.
But experts are warning the surcharge ban could come at a cost, with small businesses forced to absorb bank fees or raise prices across the board.
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From Thursday, the 1 per cent to 2 per cent surcharges on every debit and credit card tap will be gone.
While it’s being touted as a win for customers, cafe owners warn they might all end up paying more for their daily coffee.
“So I might have to go up to $5.30, $5.40, $5.50,” cafe owner Maj Mourise said.
Small businesses like cafes are set to be hit hard. Their profit margins are already tiny, and now they’ll have to absorb the bank fees that have long been passed on to customers.
“The impost on an average cafe could be $6000, $8,000, $10,000 a year,” Brad Kelly from the Independent Payments Forum said.
“It could well send a number of small businesses straight to the edge.”
Adding to the pain, the Reserve Bank is reducing interchange fees — the amounts banks pay each other during card transactions. These have long funded credit card rewards programs, which means customers’ credit card fees are going up, with perks and points going down.
“Instead of needing two bank points for a Qantas or Velocity point for example, you might now need three or even four,” Daniel Sciberras from Point Hacks said.
From frequent flyers to flowers, there’s a bunch of budget headaches ahead with no advantage in sight for cash buyers.
“Because if we increase the prices there’s a major problem for the people that paying by cash, so why do they need to pay for a product that it was $10, why do they have to pay $10.50,” florist Johan Ropi said.
Mourise said the customer would be the loser at the end of the day.
“I remember when it came out, it was more about, ‘oh, the consumer’s going to save’,” he said. “Well, they’re not going to save. It’s the opposite now. They’re going to pay more.”