Australian Cafes Weigh Price Hikes As Card Surcharge Ban Looms

Surace, co-owner of Lennox Street Deli in Melbourne’s Moonee Ponds neighbourhood, says the cafe’s coffee and panini price increase is intended to replace revenue it will lose when it can no longer add a card surcharge to customer payments.

Card fees already weigh on the cafe

Bank-imposed card fees already cost the business more than A$1,000 (US$690) a week, even after it recoups part of that expense by adding a 1.9 per cent surcharge to customers’ card payments.

Once the surcharge option disappears, Surace estimates the cafe could pay an additional A$1,200 to A$1,500 a week to process transactions.

The price increase “just covers the surcharge that we’re losing”, he said.

Smaller businesses face a wider cost dilemma

The change has been described as one of the biggest shake-ups in decades and comes at a difficult time for businesses already grappling with rising costs.

Thousands of smaller Australian businesses face a similar choice: absorb the cost of customers tapping their cards, squeezing already thin margins, or build it into prices and risk driving away cash-strapped consumers.

Source: South China Morning Post