The Reserve Bank of Australia has implemented reforms banning retailers from charging customers additional fees for card payments, effective Thursday. This move aims to ease cost-of-living pressures but is met with criticism from small businesses like Monarch Cakes in Melbourne, who must raise prices due to the increased burden on their profit margins. While the RBA expects these changes will deliver around $660 million a year in lower payment costs for businesses and save consumers $1.6 billion in card surcharges annually, small business owners fear it could lead to closures if they cannot absorb the costs.
Written locally by qwen2.5:14b on 2026-09-30,
using this article's own text rather than the other coverage of the
same event (that is the story summary below).
Story summary
Starting October 1, the Reserve Bank of Australia implemented a ban on card surcharges, meaning retailers can no longer charge extra fees when customers pay with credit or debit cards. While this was intended to save consumers about $1.6 billion annually, it may lead some businesses to raise prices instead. Smaller shops and local businesses are particularly concerned; Iris Isaacs, owner of online store inSync design, said it's getting increasingly difficult to manage costs. Salon owner Sheridan Shaw echoed similar concerns, stating that absorbing these fees would be detrimental to her business financially. Additionally, the Australian Chamber of Commerce and Industry (ACCI) warns that businesses might not be fully prepared for the new regulations. As a result, some merchants like Monarch Cakes in Melbourne are already planning price hikes to cope with higher bank-imposed card processing costs, which can amount to A$1,200 to A$1,500 weekly for small cafes and delis.
Written for “Australia Card Surcharges Ban” on 2026-10-05,
grounded in this article and the 6 other(s) covering the same event.
Businesses will no longer be able to charge customers a direct fee for paying by card, in a move spruiked as helping to ease cost-of-living pressures.
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Businesses → charge → pressures
But many small businesses have criticised the change as another hit to their dwindling profit margins.
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businesses → criticise → margins
From Thursday, reforms by the Reserve Bank of Australia mean retailers can no longer charge customers an additional fee for paying by card and must either absorb the cost themselves or build it into their prices.
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retailers → mean → prices
A long-standing establishment on St Kilda's Acland Street in Melbourne, Monarch Cakes is faced with having to raise its prices for the first time in years.
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Cakes → stand → years
Manager of the 92-year-old bakery, Nikki Laski, called the ban the final straw when it comes to keeping prices stable for their many regular customers.
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it → call → customers
'We're going to have to raise the prices,' she told AAP.
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she → go → AAP
'We were due to anyway because everything else has gone up.
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everything → go → ?
'But this is going to be the straw that broke the camel's back.'
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that → go → back
Bakery manager Nikki Laski says the increased burden on small businesses could force some to close
Most experts agree the scrapping of fees is a positive result for consumers
Many big businesses, including Coles and Woolworths, were already absorbing the cost of card fees because they could afford to, Ms Laski said.
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Laski → say → fees
'It's the small businesses that do that because they have to in order to survive,' she said.
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she → do → that
To help ease the overall pressure, the RBA has also capped interchange fees, which are paid by the merchant's bank to the customer's bank each time a payment is processed.
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payment → help → bank
The Reserve Bank expects the new maximum rate of 0.30 per cent, down from 0.80 per cent, will deliver around $660 million a year in lower payment costs for businesses.
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rate → expect → businesses
Experts are split on what actual effects the changes will have at the till, according to financial comparison site Finder.
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changes → split → Finder
However, most agreed it would be a net positive for consumers.
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it → agree → consumers
Prime Minister Anthony Albanese on Wednesday backed the surcharge ban, calling it another example of cost-of-living relief put forward by his government.
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Albanese → back → government
'I think when people turn up and tap, be it at a coffee shop or a pub or buying a sandwich for lunch, they expect the price that they see to be the price that they pay,' he said.
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he → think → that
Treasurer Jim Chalmers said the ban would save consumers $1.6 billion in card surcharges and save businesses $910 million each year.
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ban → say → million
Restaurant owner John Iodice says he won't be passing the surcharge on to customers
Ms Laski said while the changes may seem like a win for customers, if the small businesses providing those services aren't around, then everybody loses.
'That whole seven cents off your coffee might mean that your favourite coffee shop closes,' she said.
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she → say → coffee
John Iodice, who runs the nearby St Kilda bar and eatery The Vineyard, told AAP he couldn't realistically pass the surcharge on to customers even if he wanted to.
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he → run → customers
'Imagine it - we've got a happy hour, $10 for a pint, but now we're going to have $10 and 15 cents?' he said.
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he → imagine → 10
'I'm going to put, 'Monday night steak special, $20 and 20 cents'?
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I → go → ?
'Obviously, we're going to just cop it.'
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we → go → it
Across the road at St Kilda's Wedge Cafe, owner Rami Omran had already raised the price of his coffees at the start of September, in part due to the impending changes.
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Omran → raise → changes
The decision wasn't just based on the surcharge ban, but also on increases in other fees and compliance costs, he told AAP.
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he → base → AAP
Cafe owner Rami Omran says the credit card surcharge will now come out of his pocket
He called an outright ban on card surcharges 'silly'.
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He → say → surcharges
'People can pass on all these other charges, but not that for some reason,' he said.
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he → pass → reason
'People can run the biggest scam of all time, which is the weekend and public holiday surcharges.
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which → run → time
'
To Mr Omran, customers didn't care in the first place about paying the surcharge, which will now come out of his pocket.
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which → care → pocket
'Everyone just tapped.'
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Everyone → tap → ?
The Aporia
