Australia's card surcharge ban pushes retailers to raise prices and promote cash

Starting on October 1, the Reserve Bank of Australia will ban merchants from applying surcharges to card purchases, ensuring identical pricing for cash and card payments. The policy also tightens limits on banks' interchange fees, which the RBA estimates will save businesses about $910 million annually. Small retailers, such as baker Dylan McQueen and nursery owner Calum Haygarth, say they will likely raise prices to cover the lost revenue from card fees, even as they display signs encouraging cash payments.

While cash usage has risen slightly after such signage, it still represents a small share of transactions. Economists note that many shoppers no longer carry cash, and the cost of handling cash remains, though lower than card processing fees for small firms. The change aims to level the playing field for consumers but may shift the cost burden onto higher shelf prices.