‘It’s getting impossible’: Surcharge ban leaves small businesses scrambling to cover card fees
Updated . First published at
Cafe owners Joel and Michael thought Australia’s ban on card surcharges would bring relief to their customers.
Instead, they say they’ve been left with thousands of dollars in payment fees and nowhere to pass them on.
Joel and Michael run Quarter Two cafe in Melbourne’s Moonee Ponds. A Current Affair
The brothers who run Quarter Two cafe in Melbourne’s Moonee Ponds are among small business owners now weighing up how to absorb the cost without raising prices.
Businesses are still charged every time a customer taps their card, but can no longer add that cost as a separate surcharge.
The ban was spruiked as a $1.6 billion annual saving for consumers, but some customers are already seeing higher prices and new fees instead.
“I think it’s a $1.6 billion lie,” Ballers Clubhouse owner Josh Lefers said.
“It’s assuming the public is too stupid to understand that we’re just going to have to absorb the cost – either small businesses or customers absorb the cost when venues and businesses have to raise their prices.
“The everyday person is going to have less in their pocket.”
Seagull Greek Taverna owner Leonid has stopped accepting cards and now asks customers to pay using PayID. A Current Affair
Joel and Michael plan to absorb the extra cost rather than increase their menu prices.
“Nobody likes uncertainty, and I think especially for business owners right now, we are definitely in uncertain times,” they said.
Other operators are finding ways around card fees altogether.
Seagull Greek Taverna owner Leonid, in Frankston, has stopped accepting cards and now asks customers to pay using PayID.
“I don’t know if I’ll ever go back to cards, to be honest,” he said.
“It’s getting impossible to even run the business.”
Independent Payments Forum co-founder Brad Kelly said the ban had transferred the cost directly to small operators.
The card surcharge ban was spruiked as a $1.6 billion annual saving for consumers. A Current Affair
“What we’ve successfully achieved here is removing surcharges, which is what Visa, Mastercard, EFTPOS and AMEX have wanted,” he said.
“But we’ve transferred that fee impost straight onto small businesses at a time they can least afford it.”
He said some businesses had already introduced charges that looked similar to the old surcharges.
One NSW A Current Affair viewer said an 11-cent surcharge on an order of hot chips had disappeared, only to be replaced by a 23-cent “platform fee”.
Another cafe has increased its prices by the exact amount previously charged as a card surcharge.
Customers told A Current Affair they were noticing higher prices at some venues.
Independent Payments Forum co-founder Brad Kelly said the ban had transferred the cost directly to small operators. A Current Affair
“A lot of places have taken their coffee up to $6.50, $7,” one said.
Others said they were considering returning to cash, with one customer saying.
“If they offered me a discount, I would pay in cash. Yeah,” one said.
Kelly said credit cards remained important for households and businesses managing cash flow.
“I think we need to consider that we just don’t throw all credit cards out as some kind of bad thing,” she said.
“The reality is that a lot of businesses and people use them to manage cash flow.”
When asked who would benefit most from the new rules, he pointed to the major payment companies.
“So the winners are Visa and Mastercard. These are enormous American technology companies, and they sit very quietly in the background,” he said.
Joel and Michael said small businesses needed more support.
“We really need to look at helping small businesses grow, rather than keep pushing them to shut down and struggle.”
We’d love to hear from you
