Australia’s credit card-surcharge ban squeezes small retailers
About 16% of Australian businesses currently surcharge, according to the country's central bank.
Australia is set to ban credit card surcharge fees starting October 1, affecting thousands of small retailers who currently pass on bank-imposed card fees to customers. The move, announced by the Reserve Bank of Australia, aims to increase transparency for consumers and restore costs to the merchants. However, the ban could squeeze already-thin profit margins for many small businesses, as prices may need to be raised to cover the loss of surcharge income.
With inflation and rising wages adding to operating costs, some retailers may have to absorb the additional expense or risk losing customers to those who can pass the cost on. Around 16% of Australian businesses currently apply surcharges, resulting in annual fees of about A$1.6 billion. Despite the ban, banks and card networks can still charge businesses to process transactions.
The change brings Australia in line with practices in Britain and the European Economic Area, where surcharges on most consumer debit and credit cards are also prohibited.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
