Australian businesses use credit card surcharge ban to hike prices

Australian businesses are using a new ban on credit card surcharges as cover to introduce larger price increases for customers, according to the Guardian. Experts warned that venues like cafes and restaurants are adopting round-up pricing strategies as they face rising interest rates and climbing operational costs. [1]

The Reserve Bank-led reform banned credit card surcharges on 1 October, as reported by the Guardian. The typical surcharge was worth about 1.5 percent of a transaction, but recent price hikes on items such as coffee appear to exceed that amount. [1]

A payment surcharge is an extra fee charged by a merchant to cover payment processing costs, such as merchant service fees imposed by credit card companies. Retailers usually face higher costs when customers pay using credit cards rather than traditional cash payment methods. [3]

The price increases come alongside broader policy debates around electronic payments in Australia. As FTMQ News reported earlier, Treasurer Jim Chalmers delayed a separate proposed ban on credit card tax payments following strong pushback from small businesses concerned about cash flow impacts. [1][4]