Australian businesses are reportedly using the recent ban on credit card surcharges as a justification for implementing significantly larger price increases, according to experts. The surcharges, which typically amounted to around 1.5% of a transaction, were prohibited from 1 October 2026 as part of a Reserve Bank-led reform.
An online coffee price tracker, Small Flat White, reported that 17% of cafes surveyed have raised their prices since the surcharge ban began. Among these, the average increase for coffee was 50c, representing more than a 10% rise, which is considerably higher than the typical 1.5% card surcharge fee.
Stephen Wu, an economist at UBS, suggested that strong consumer demand and a high inflation environment might be allowing merchants to use the ban as "cover" to pass on broader cost pressures. The Australian Competition and Consumer Commission (ACCC) has issued a warning to businesses not to mislead consumers by attributing price rises solely to the surcharge ban if other costs are also a factor.
Wes Lambert, chief executive of the Australian Restaurant & Cafe Association, noted that business costs are rapidly increasing, citing rising produce costs, steep rents, and recent adjustments to junior pay rates. He also mentioned that many business owners are affected by four interest rate hikes in 2026, which have increased repayments on variable-rate loans and equipment financing.