Australian Cafes Raise Prices After Card Surcharge Ban

The Reserve Bank of Australia implemented a ban on credit card surcharges on October 1, 2026, prohibiting businesses from adding extra fees for payments made via Visa, Mastercard, American Express, or EFTPOS. While the central bank estimated that folding these costs into advertised prices would lift the consumer price index by only 0.1%, early data suggests a sharper impact in the hospitality sector. Data from the Small Flat White tracking project shows that approximately 17% of surveyed cafes raised coffee prices, with the average small flat white increasing to $5.16.

These price hikes, often around 50 cents, significantly exceed the 0.5% to 1.5% surcharges previously charged. The Australian Restaurant and Cafe Association described the trend as an unintended consequence, noting that the ban acted as a tipping point for operators already facing rising wages and input costs. Some businesses have responded by shifting to cash-only payments or bank transfers.

To prevent businesses from bypassing the rules, the Australian Competition and Consumer Commission warned that relabeling surcharges as service or daily fees may constitute misleading conduct. The Australian Banking Association noted that banks are responsible for only some of the fees, suggesting other costs stem from providers like Square or Tyro. Economists from Westpac and AMP suggest the macroeconomic impact will be minor, as the adjustments represent a one-off bundling of costs rather than sustained inflation.