Rising costs and new card rules threaten small Australian retailers

Regional retailers across Australia are grappling with a surge in operating expenses, and a new rule that bans card-payment surcharges from October 1 is set to intensify the pressure. In the small town of Keith, clothing shop owner Francene Martin closed without a single sale despite heavy discounts, while in Ballarat, café Prey, run by Eddie and Remi van den Akker, highlights how slim profit margins are eroded by costs such as cups, lids, wages and EFTPOS fees.

CreditorWatch’s Business Risk Index shows one in eight cafés have closed in the past year, and payment defaults are rising for a third month in a row. Although the Reserve Bank of Australia estimates the surcharge ban will save $910 million in transaction fees nationwide, analysts like Ivan Coulhoon warn that the burden will shift to small operators already squeezed by inflation, higher interest rates and competition from online platforms. Business owners are urging local customers to support independent stores to keep community hubs alive.