Australia’s card surcharge ban forces cafes, shops into price increases

The co-owner of Lennox Street Deli in Melbourne’s Moonee Ponds neighbourhood said bank-imposed card fees already cost his business more than A$1,000 (US$690) a week, even after the cafe recoups some of the expense by adding a 1.9 per cent surcharge to customers’ card payments. Once that option disappears, Surace estimates the cafe could pay an additional A$1,200 to A$1,500 a week to process transactions.

The coffee and panini price increase “just covers the surcharge that we’re losing”, he said.

Thousands of smaller Australian businesses face a similar choice: absorb the cost of customers tapping their cards, squeezing already thin margins, or build it into prices and risk driving away cash-strapped consumers.