NSW small businesses weigh price rises after RBA card surcharge ban

The Reserve Bank of Australia's ban on card payment surcharges took effect on October 1, ending the practice of adding extra fees for credit or debit card payments made via EFTPOS, Mastercard, Visa and American Express. The RBA said the changes were in the public interest and would make the payments system more transparent and less confusing for businesses and customers.

Small business owners in New South Wales are now working out how to cover the merchant fees that banks still charge. Sydney cafe owner Philip Barbaro said he had increased the price of some menu items this week to offset the bank surcharge, but kept coffee prices unchanged in a competitive city market. Chris Skuce, a specialist baker who opened the Jamaican Patty Bakehouse in Sydney's inner west a year ago, said he had been absorbing the fee to keep making the patties of his childhood, but would probably raise prices in the new year.

Paul Nicolaou, executive director of advocacy group Business Sydney, said rising interest rates, energy costs and a drop in discretionary spending were already squeezing households and businesses, and price rises were being introduced across the board. He said business owners need to cover their costs, and that ultimately the consumer would pay. Mr Nicolaou argued banks and other payment platforms should act on merchant fees, questioning whether a fee is necessary now that payments are electronic.

The Australian Competition & Consumer Commission said businesses can build the fee into their pricing structure, but must not mislead consumers about their prices or the reasons for any price changes. An ACCC spokesperson said businesses may offer discounts to customers who use a particular payment method, such as cash or PayID, provided the discount is clearly disclosed before consumers choose to book, order or pay. Businesses should not display only the discounted price or make it more prominent than the full price.

Mr Barbaro said he was looking at alternatives for customers and suggested cash could become an incentive. Mr Skuce said he was not considering cash discounts, noting most people want to pay by card and handling cash is a hassle. He said he saw no net benefit for consumers because prices would increase.