Who Is Paying for the Card Surcharge Ban, One Week On?
A week after the surcharge ban, the cost has moved, not disappeared.
Cafes are lifting prices by up to 10%, large suppliers are charging Amex fees of around 2%, and the ATO stops taking cards on 30 November.
Consumer confidence is also at its weakest in decades. Owners are raising prices into a market running out of tolerance.
The Menu Price Reset
The Small Flat White tracker, which follows more than 1,500 cafes, shows about 17% now charging more than before 1 October. The typical rise is 50 cents, nearly 10% of the price. The surcharge it replaces was usually 0.5% to 1.5%.
Some of that gap is rounding. But a 10% rise against a 1% cost is a pricing decision, not cost recovery, and customers can do that maths.
Customers Have Run Out Of Room
Here is why that matters. The Westpac-Melbourne Institute consumer sentiment index fell 4.7% in October to 80.4. Among respondents surveyed after the RBA lifted the cash rate to 4.6%, it dropped 20% in a month to 67.2, the worst reading this century.
Westpac says this is the worst stretch of extended weak sentiment since the early 1990s recession. Its economists describe a cost-of-living squeeze with no end in sight. They also note that the concern is cost of living and interest rates, not yet the job losses and insolvencies of a full recession.
I joined Toyota in the early 1990s. The first Iraq war had just started . I know what weak sentiment does to buying decisions, and it does not take a recession.
AMP's economist makes the point for business owners. Even if your costs are still rising, there is a limit to how much of that you can pass on when households are tightening their budgets. That limit is closer than most operators think.
The Cost Moved To The Supplier Invoice
Meanwhile, the AFR reports that REA Group now adds 1.8% plus GST for customers paying by Amex. Shell Energy is at 2.03%, Dicker Data up to 2.04%, and others between 1.85% and 2.2%.
This is legal. The AFR has corrected its original report to say it is a fee, not a surcharge, under an Amex arrangement for qualifying business-to-business payments.
The cost of accepting cards never went away. It left the checkout and appeared on the invoice. Read your next supplier statement.
The ATO Deadline Is Close
The ATO stops accepting credit cards from 30 November. If you use a card to bridge a BAS, you need a replacement before the date, not after.
What I am telling owners
Test your price rise against your real cost. If your card cost was 1%, a 10% rise needs a better reason than the ban.
Watch your customers, not just your costs. With sentiment this weak, a price rise can cost you more than it earns.
Read your supplier invoices. Look for new fees tied to Amex or card payments.
Fix your ATO arrangements early. Move any payment plan linked to a card and talk to the ATO before a bill is due.
Franchisors, check the royalty base. If franchisees raise prices, your royalty rises with them. Be ready to explain why that is fair.
FAQs
Has the surcharge ban raised prices?
Early evidence says yes in cafes.
About 17% have raised flat white prices, typically by 50 cents. Economists expect a small, temporary effect on overall inflation.
How weak is consumer confidence?
The October index fell 4.7% to 80.4.
Respondents surveyed after the RBA's rate rise scored 67.2, the worst reading this century.
When does the ATO stop accepting credit cards?
30 November 2026.
Payment plans linked to a card will need a new payment method.
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