u/INFEKTEK

So I work in payments. I've worked at/with a few of the leading independent eftpos terminal companies think:

Tyro

Smartpay/Shift4

Zeller

PayNuts

Lightspeed

EposNow

Adyen

Till/Nuvei

As of October 1st this year most card surcharges will be banned. Consumers are rightly cheering this move but there are some catches I want to tell you about.

What the big hotels/bars/restaurants/cafes are planning will be worse than a 1.1% to 1.9% card surcharge.

Firstly there is a loop-hole for a 'service fee' which is up to the discretion of the business to set and doesn't have to correlate at all with the cost of acceptance.

Just has to be displayed on a menu or sign. So instead of a 1.5% card surcharge you may have a 1.5% service fee. It falls under the same rights as charging a weekend or public holiday fee and the worst part is you will be paying it even if you pay with cash.

Secondly, most are looking at their whole cost of acceptance: scheme, interchange, acquiring margin (cost plus), POS, terminal rental and folding that into the price.

Now, because they don't know if you're going to be paying with eftpos card which could cost them $0.10 or an international card that could cost them over 3% they will choose the higher path to ensure it's all covered. So with all costs of acceptance folded in expect a price increase of around 10% to 15% to the actual ticket price of your food, coffee, hotel, ect.

I would also expect to see a cash discount come back into play so you could have one price for card which accounts for the cost of acceptance and another price for cash.

Thirdly, Amex and some international cards are excluded from this first round of the surcharge ban so a surcharge for Amex/JCB/Diners ect is still allowed.

Lastly, some advice before October 1st

A lot of the surcharging terminals have a fixed surcharge between $0.10 - $0.30 for DEBIT inserts.

If you tap your card you will pay the percentage surcharge rate for Visa or Mastercard but if your card is a debit card and you insert/swipe and use your pin it will only cost you 20 to 30 cents. This is a game changer if you go to a mechanic who surcharges.

BONUS: A business in Australia is generally required by law to allow you to pay in a fee-free way by cash or another means so if they don't take cash they aren't allowed to surcharge you and you should report them