Queensland small businesses are increasingly turning to cash and bank transfers as payment methods in response to a new ban on credit card surcharges, which took effect in early October. The change prohibits merchants from adding separate fees to cover credit card processing costs, forcing many businesses to absorb those expenses or find alternative payment options.
The surcharge ban, introduced by the Reserve Bank of Australia (RBA), aims to protect consumers from additional charges, but it has also raised concerns for small businesses’ profitability. According to a recent poll by Business Chamber Queensland involving 920 business owners, more than one-third of respondents plan to absorb merchant fees themselves, while others are exploring strategies such as renegotiating fees, raising prices, or encouraging customers to use alternative payment methods like PayID, direct bank transfer, or cash.
Chloe Ryan-Uhlich, owner of No Milk Media, highlighted the financial strain the changes present. She estimates that if all her clients paid by credit card, her business would incur more than AUD 7,000 annually in transaction fees. "That’s a significant expense for a small business, particularly when clients were previously happy to take on that fee themselves," she said. Ryan-Uhlich noted that absorbing these costs limits her ability to invest in workforce development or business expansion.
Despite a recent postponement of a related Australian Taxation Office (ATO) ban on credit card payments for tax bills—a decision delayed after industry backlash—the pressure on businesses remains. The temporary reprieve, announced by Treasurer Jim Chalmers, delays but does not eliminate the financial challenges for small enterprises managing payment fees.
Business Chamber Queensland CEO Heidi Cooper stressed that small businesses are facing multiple cost pressures, including rising energy and fuel prices, increasing regulatory burdens, and tax demands. “They’re working hard to keep their doors open, support their staff, and keep prices as affordable as possible for their customers, while navigating rising costs on multiple fronts,” Cooper said. She added that most businesses are reluctant to pass on fees to consumers, instead seeking to manage costs internally or through negotiations with financial institutions.
Nationwide, small businesses with fewer than 20 employees make up 97 percent of actively trading companies, according to the Australian Bureau of Statistics. Queensland has experienced a net increase of 19,244 registered businesses, a trend that brings both opportunities and mounting operational challenges for local entrepreneurs.
The combined effect of the credit card surcharge ban and ongoing economic pressures is prompting some Queensland businesses to reconsider how they handle payments, with a small percentage of those surveyed contemplating no longer accepting credit cards altogether. Others are offering discounts for customers who opt for alternative payment methods, attempting to balance cost management with customer convenience.