'Someone has to pay': Small businesses grapple with card surcharge ban

In the wake of the Reserve Bank of Australia's (RBA) ban on card payment surcharges, small businesses across New South Wales are struggling to determine how to cover the cost of merchant fees. The ban, introduced last week, aims to make the payment system more transparent and less confusing for both businesses and customers.

Some business owners have chosen to increase the prices of their items, while others have opted to absorb the cost. Sydney cafe owner Philip Barbaro reported that his business had to pay around $150,000 in merchant fees annually, and he had to raise prices for some items to offset the bank surcharge. The cafe industry in Sydney is highly competitive, and Barbaro noted that he had not increased the price of coffee but had to raise prices on other menu items.

Specialist baker and owner of Jamaican Patty Bakehouse, Chris Skuce, said he was currently absorbing the cost of the bank fee, as he wanted to maintain the prices of his patty products that hold sentimental value for him. He plans to increase prices in the coming year. Skuce noted that many customers prefer paying by card, making it inconvenient to handle cash.

Advocacy group Business Sydney's executive director, Paul Nicolaou, stated that many business owners are grappling with rising interest rates, energy costs, and decreased discretionary spending, which are affecting both households and businesses. He added that price increases were now being introduced across the board, and ultimately, consumers would bear the burden.

Nicolaou called on banks and other payment platforms to address the issue of merchant fees, particularly in an electronic age where such fees might not be necessary. The Australian Competition & Consumer Commission (ACCC) spokesperson emphasized that businesses could include the fee in their pricing structure but must not mislead consumers about the reasons for price changes.

Businesses offering discounts for specific payment methods, such as cash or PayID, must disclose this information clearly to avoid misleading consumers.