Surcharge ban won't cut prices, Brisbane owner warns

A ban on debit card surcharges takes effect this week, with the Albanese government promoting the change as a $1.6 billion annual saving for Australian shoppers. But a Brisbane small business owner and 4BC radio host says the fees are not disappearing, only shifting onto the price of goods and services across the board.

Under the old system, many businesses added a small surcharge, often a few cents on a coffee, to cover the cost of processing card payments. From Thursday, that line item is banned. The presenter argued the underlying merchant fees charged by banks have not gone away, and that businesses will now have to fold those costs into their regular prices instead of itemising them separately.

Using their own cafe as an example, the host said card transactions currently attract a fee of around 1.7 per cent, a cost that will now need to be built into menu prices rather than charged only to card users. That means customers paying with cash, who previously avoided the surcharge altogether, will end up contributing to a cost they did not create.

The impact was not limited to hospitality. The host pointed to a recent vehicle registration renewal where the card transaction fee alone came to eight dollars, and warned tradespeople completing on-the-spot card payments for jobs could see similar costs, citing a hypothetical $17 fee on a $1,000 plumbing job that would previously have been passed on as a surcharge but must now be absorbed into the quoted price.

The core argument is one of accounting rather than elimination: if a $1.6 billion cost is no longer allowed to be itemised as a surcharge, businesses facing tight margins are likely to raise base prices to cover it, spreading the cost across all customers rather than just those paying by card. The host noted their own business had recently operated on a wafer-thin profit margin some weeks, leaving little room to absorb bank fees without adjusting prices.

The segment also raised concerns about the broader inflationary effect of many businesses making similar adjustments at once, suggesting the change could add modest upward pressure on prices across multiple industries simultaneously, even as the visible surcharge line disappears from receipts.

The show's guest, a Brisbane-based business figure identified as Phil Debella, was set to weigh in on how the change would affect operators heading into the new rules. The broader debate reflects a familiar tension in cost-of-living policy: banning a visible fee does not necessarily remove the underlying cost driving it, and businesses operating on thin margins may have little choice but to pass it on in a different form.

For consumers, the practical upshot is that surcharge lines will vanish from receipts this week, but shoppers are being urged to watch whether base prices creep upward in the weeks that follow as businesses adjust to the new rules.