Surcharges end October 1. The doom is overdone. So is the free lunch. Here's the move.
From the first of October, the card surcharge is dead. The RBA has banned them outright on eftpos, Visa and Mastercard, debit and credit alike. Australians pay around $1.6 billion a year in surcharges, so you can guess how the announcement played with the public. Champagne emojis all round.
Behind the counter, the mood is different. One Sydney cafe owner told News Corp he's staring at a $22,000 annual hit when the fees he currently passes on become his to swallow. Multiply that worry across every till in the country and you've got an industry that thinks October 1 is the day the floor drops.
I've read the actual reforms, and I'm going to annoy both camps: the panic is overdone, and so is the celebration.
Here's the part of the story that barely gets reported. The same reform that bans surcharges also caps interchange fees, the wholesale cost banks charge to process a card, cutting the cap from 0.8 per cent to 0.3. The RBA's own maths says total merchant payment costs should fall by hundreds of millions a year, with small businesses seeing the biggest percentage savings. So yes, you lose the ability to pass the fee on. But the fee itself is coming down, and small operators like us have always been charged the worst rates. Some of that $22,000 nightmare shrinks before it arrives.
And the celebration side deserves its own cold water. That $1.6 billion doesn't vanish. Whatever processing cost remains after the caps has exactly one place to go: the menu. The customer who cheered the death of the 1.5 per cent surcharge will meet it again as ten or fifteen cents inside the price of their cappuccino, along with the cash customer who never generated a card fee in their life and now pays their share of everyone else's tap. Nobody voted for that bit.
So here's what I reckon a cafe should actually do, and it's one move. Reprice once, honestly, before October 1, and say why. Work out your true payment cost under the new capped rates, not the old ones, fold it into the board, round sensibly, and put a small sign on the counter for a fortnight: prices now include card costs, as required by the new rules. Done. What you should not do is the sneaky version, a silent 30 cents here, another 20 in December, hoping nobody notices. Your regulars notice everything. They'll forgive one honest adjustment with a reason attached. They don't forgive drift.
The venues that get hurt by October won't be hurt by the ban. They'll be hurt by pricing that was already too thin to absorb anything, wearing a new excuse. If a 1 per cent processing cost is the difference between your cafe surviving and closing, the surcharge was never the problem.
One honest adjustment, one small sign, then back to making coffee. That's the whole survival guide.
Stay caffeinated. I'm out.
Carlos
Sources: Reserve Bank of Australia payment reforms as reported by News Corp, the Canberra Times and major bank briefings.
