Under the new rules, a $10 sandwich will cost $10 whether it is paid for with cash or a card. When the change was announced, RBA governor Michelle Bullock said surcharging no longer worked as intended and most consumers wanted it stopped.
Business reaction is mixed. Mount Gambier bakery owner Dylan McQueen paid $5,785 in card fees last financial year despite years of displaying "CASH PREFERRED" signs, yet cash made up just 16 per cent of his transactions. "People pay for convenience," he said. He never added a card surcharge himself. "It's just out of principle, I don't believe in it."
Nursery owner Calum Haygarth took the opposite approach. He said merchant fees ran to "tens of thousands" of dollars in annual operating costs and eroded margins on small items, so card-paying customers were charged an extra 2.9 per cent for products under $20. "It's not justifiable to be running a business going backwards, basically," he said.
Mr Haygarth said he had noticed banks "scrambling" to lower their merchant fees ahead of the deadline but believed he would still need to raise prices. Many businesses used surcharges to keep advertised prices low, and the end of surcharging could now show up in higher price tags as costs are absorbed or passed on.