Consumers who prefer using cash may face unintended consequences due to recent changes by the Reserve Bank of Australia (RBA). With a new ban on card surcharges, businesses have indicated that the cost of card transactions will likely be incorporated into overall prices, affecting all shoppers, regardless of their payment method.
Starting in October, a new mandate from the RBA’s Payments System Board will prohibit cafes, restaurants, and retailers from tacking on additional charges for payments made via eftpos, Mastercard, or Visa debit and credit cards.
The RBA asserts that these adjustments are intended to remove unexpected fees and provide customers with straightforward, all-inclusive pricing.
However, industry insiders caution that the practical effects could be the opposite. They suggest that businesses may be forced to adjust by raising prices to cover transaction costs.
Jason Bryce, who leads the cash advocacy movement Cash Welcome, expresses concern that those who use cash will ultimately shoulder these additional costs.
“I’m worried that cash users will end up subsidizing the perks, such as frequent flyer points, that come with premium credit card usage,” Bryce remarked.
‘So who is losing? Ordinary bank account holders with a debit card, cash users, people budgeting – and I can’t see how small businesses are going to like this at all.’
He said the previous system was fairer because it clearly separated card fees from the cost of goods.
Businesses warn prices will rise for all shoppers, even cash users, as card fees get baked into menus instead of as a surcharge
Card surcharges like these will be banned from October
Under that system, Australians who paid with cash or bank transfer avoided the extra surcharge, while only those who chose to pay with a debit or credit card were charged the additional fee.
That means Australians who pay cash will be footing the bill for the perks enjoyed by credit card users, including reward points, free gifts and luxury travel deals.
Businesses will also be less likely to give discounts to those paying in cash.
‘Ordinary people are going to be paying for the rich’s benefits, the holidays, the concierge service, the free gifts,’ he told Daily Mail Australia.
‘The card schemes have got everything they’ve ever wanted.
‘They’re going to hide that cost and everybody’s going to pay – and it doesn’t matter whether you bring a card, a phone or cash to the shop.’
Australian Restaurant and Café Association chief executive Wes Lambert called the decision disastrous for venues already under intense financial pressure.
‘Today was a sad day for restaurants and cafes around Australia,’ Mr Lambert said.
‘If a business does not raise its menu prices by at least what it pays in merchant fees, its profit will fall. That is not an opinion, it is simple maths.’
Lambert said the ban comes amid a perfect storm of rising costs.
‘Hospitality businesses are grappling with a global fuel crisis, weaker tourism, higher interest rates and stubborn inflation,’ he said.
‘On top of that, we are expecting a 4.5 to 6 per cent increase in award wages from 1 July, the same day payday super comes into effect.’
He warned labour costs are likely to climb further.
‘To add to the pain, the Fair Work Commission has announced a ban on junior rates for fast food,’ Mr Lambert said.
‘We expect cafes and restaurants will also be impacted by that decision in due course.’
