Picture this: You’ve just ordered an oat flat white at your local cafe.
The chalkboard menu says it is $5 but when you tap your card, you pay $5.07.
From today, that extra $0.07 is no more.
The Reserve Bank of Australia (RBA) has banned businesses from adding card surcharges.
Some businesses have indicated that the changes will force them to either increase their prices or lower their margins.
Here’s what you need to know.
Surcharges
Prior to today, if you paid for things using your card, you usually had to pay a 1–2% surcharge.
This is because banks (or payment companies like Square or Tyro) charge businesses a fee for accepting card payments, which many businesses passed on to customers.
RBA data shows Australian consumers were paying $1.6 billion a year in card surcharges.
The RBA began reviewing card surcharges in 2024, amid growing concern about the rising cost of living.
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RBA ban
From today, businesses can no longer charge you extra for paying by card.
This means if the menu price is $5, you can’t be charged $5.07 when you pay using your card.
The ban covers payments using eftpos, Visa, Mastercard and American Express, including debit and credit cards.
Businesses will still pay fees to the bank or payment company.
They are just not allowed to add them as an extra fee at checkout.
Some businesses have indicated they may raise their prices to cover these fees or lower their margins.
Businesses
The Council of Small Business Organisations Australia (COSBOA) has stated the changes will apply further pressure to small businesses.
“[The cost] either comes out of an already tight margin, has to be recovered somewhere else, or the business has to find a cheaper way of doing things,” said COSBOA CEO Skye Cappuccio.
“Some may be able to absorb some or all of the cost, while others may need to review their overall pricing,” she added.
