Debit and credit card surcharges will end from October 1. The changes do not extend to hospitality sector weekend or public holiday surcharges or other fees, such as booking fees.
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TRANSCRIPT
Pizzeria owner Paolo Meccariello has always prided himself on his product.
"Our specialty is foccacia sandwiches, I'd say 80 per cent of sales are foccacia sandwiches, but also pizza by the slice. All following the traditional recipes from Puglia, south Italy where we're from."
Despite the added expense, the pizzeria owner imports most ingredients from Italy.
But now, he's faced with another business expense, after the Reserve Bank announced reforms to surcharge fees.
From October 1st, those fees will no longer be passed onto consumers.
Instead, they will be paid for by providers.
"We heard the news. It's for sure it wasn't, you know, we started considering, what to do because it's, if you think about it day by day, it might seem like not a lot, but once you do the math for at the end of the year - it's a lot of money. So it was like okay. That's another thing we have to consider to make the, you know, make the business work."
The RBA estimates it will save consumers around 1.6-billion dollars a year.
While there's no cap on how much this fee might cost, there will be limitations around interchange fees - which are the fees businesses pay to process the transaction.
The maximum amount will drop from 0.8- to 0.3-percent, the equivalent of 30 cents on a 100-dollar purchase.
The CEO of the Australian Restaurant and Cafe Association, Wes Lambert, says rewards cards, annual fees and bonus points are some of the ways banks might try clawing profits back.
"The banks and the payment service providers have businesses to run, and even if you try to change the model, they're going to have to earn that $1.6 billion some way. Now, many have said they're going to increase their, credit card fees to consumers. Many have said they're gonna increase interest to cardholders. Many have said they're going to decrease the interest-free days and drop the awards points that they're offering to those consumers."
For Mr Meccariello, it means considering raising prices.
"Us as a small business will either have to absorb that - or increase the prices. That's the, that's only a two-way road. We still don't know what to do because we want to keep our prices as affordable as we can. And we know its challenging times for everyone, but it is also a challenging time for small business."
Other businesses are turning towards Pay ID and bank transfers, removing credit or debit card payments altogether.
In addition to absorbing card payment surcharges, there's also concern for another merchant fee, with buy now pay later services, which the Reserve Bank says grew by $1.5 billion in 2025.
For years, pet shop Kellyville Pets in Sydney's west absorbed card surcharge fees to compete with bigger pet stores.
But the store's marketing manager, Helen Besgrove, says the bigger expense is from merchants like Afterpay, which imposes around a 7-percent transaction fee that must be paid by the business.
"On average here, we have about five percent are probably buy now, save later, payments, which is roughly 30, 40 a week perhaps. But yeah, it's enough of a portion for that to be seven percent of fees taken on five percent of our transactions. It's huge and really impactful for a small business like ours."
Personal finance expert at Finder, Sarah Megginson says she expects in time, these charges may come under stricter regulations.
"It is one of the newest types of payments, so it's got the least amount of regulation so far. But I think if we've seen the regulators act so far on credit card surcharges of one to two percent, it stands to reason that they're gonna take a look at these higher percentages that buy now, pay later are charging and make some decisions there as well."
