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Research commissioned by small business lender OnDeck Australia found 44 per cent of surveyed businesses planned to increase prices to offset the additional costs, while 66 per cent expected the ban to increase their expenses.
The ban, which took effect on 1 October 2026, was designed to save consumers an estimated $1.6 billion in card surcharges, or around $80 annually for each card-using consumer.
However, businesses still face costs for accepting card payments, with the survey finding that some of those expenses could be passed on to consumers through higher prices.
The survey of 253 Australian small businesses across retail, hospitality, e-commerce and service-based sectors found 23 per cent expected their costs to increase significantly.
While 44 per cent planned to raise prices, just 23 per cent said they would absorb the additional payment costs.
A further 17 per cent planned to encourage customers to use lower-cost payment methods, while 13 per cent intended to review or renegotiate fees with their payment providers. Another 12 per cent said they would look to reduce costs elsewhere in their business.
Concern about the impact of the ban was also widespread, with 61 per cent of businesses surveyed worried about how the changes would affect them over the next 12 months, including 21 per cent who said they were very concerned.
The pressure was particularly pronounced in hospitality, where 69 per cent of businesses expected their costs to increase, 51 per cent planned to raise prices and 65 per cent were concerned about the impact of the ban over the next 12 months.
Brokers are also pushing back on the ban.
Last week, It’s Simple Finance founder Joseph Daoud joined forces with Tax Invest Accounting co-founder Belinda Raso to step up their campaign against the surcharge ban, launching billboards at Canberra Airport and a national television commercial featuring more than 30 small-business owners.
OnDeck Australia CEO Cameron Poolman said the findings showed the new rules shifted payment costs rather than removing them.
“The idea that this would be a win for consumers ignores how businesses operate,” Poolman said.
“For many businesses, merchant fees are a real operating cost. If the business can no longer recover that cost at the point of payment, it has to recover it somewhere else. If the cost of payment is simply built into the price of the coffee, the customer is still paying for it.
“The bigger concern is what happens when thousands of businesses make the same decision. At a time when inflation is already elevated and interest rates are rising, further price increases risk adding to inflationary and cost-of-living pressures rather than relieving them.”
ATO payment changes add to cash flow pressures
The surcharge ban comes as small businesses face other changes to payment options, including the Australian Taxation Office’s (ATO) plans to stop accepting credit card payments.
The ATO initially announced it would no longer accept credit card payments after 30 November 2026, potentially affecting businesses that use credit cards to meet tax obligations or manage the timing of cash outflows.
However, Treasurer Jim Chalmers intervened on 9 October, extending the arrangement until 30 June 2027 after acknowledging the original time frame was “inadequate”.
The extension gives businesses more time to adjust, but Poolman said the changes highlighted the need to consider how policy decisions affect small business cash flow.
“There is a certain irony in businesses being told they should absorb card-processing costs, when even the ATO decided it wouldn’t accept credit card payments.
“For small business owners already dealing with elevated operating expenses and continued pressure on margins, expecting them to absorb merchant fees is a big ask. Removing a payment option that some use to manage short-term cash flow is yet another blow for many small businesses.
“When policy settings make cash flow harder for small businesses, they need other options. Small business lenders like OnDeck provide working capital when businesses need it.”
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