At Umina Beach Book Nook on the NSW Central Coast, the great Australian card-surcharge upheaval has so far produced a fairly straightforward result. “We’ve had questions about the surcharge. We have always absorbed the costs. So no price changes at the Book Nook,” owner Kate Toon wrote on social media. Since October 1, retailers can no longer add a separate fee when customers pay by card. However, the cost behind that surcharge has not disappeared.

Every time a customer taps or inserts a card, the retailer typically pays a merchant fee to its bank or payment provider to process the transaction. Until the start of this month, some businesses passed that cost directly to customers through a card surcharge.

The RBA’s ban removed that option, leaving retailers to absorb the fee themselves or recover it elsewhere through their pricing. “We have set a minimum transaction fee for cards of $5. Even that has annoyed some customers,” Toon told Inside Retail. “It’s all just hard; margins are already so tight it’s just another nail in the small business coffin.”

Across NSW, retailers and hospitality operators are coming to different conclusions. Sydney cafe owner Philip Barbaro told the ABC his group pays about $150,000 a year in merchant fees and has increased prices on some menu items while leaving coffee untouched. “Now that is a big hit to my business,” he said.

Jamaican Patty Bakehouse owner Chris Skuce has absorbed the charge for now, but expects prices to rise in the new year.

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