Cash users could be hit hardest by the RBA’s ban on card surcharges, as businesses warn the cost of card payments will be built into prices – meaning everyone pays, regardless of how they shop. 

From October, cafes, restaurants and retailers will be barred from adding surcharges to eftpos, Mastercard or Visa debit and credit card payments under a ruling by the Reserve Bank’s Payments System Board.

The RBA says the changes will eliminate ‘surprise fees’ and deliver clearer, all-inclusive pricing.

But industry leaders argue the real-world impact will be the opposite, warning businesses will have little choice but to pass costs on through higher prices.

Jason Bryce, who runs cash advocacy group Cash Welcome, said people who pay in cash will ultimately bear the cost.

‘I’m concerned cash users are going to end up paying for the frequent flyer points and the benefits that accrue to people using fancy credit cards,’ he said.

‘So who is losing? Ordinary bank account holders with a debit card, cash users, people budgeting – and I can’t see how small businesses are going to like this at all.’

He said the previous system was fairer because it clearly separated card fees from the cost of goods.

Under that system, Australians who paid with cash or bank transfer avoided the extra surcharge, while only those who chose to pay with a debit or credit card were charged the additional fee.

That means Australians who pay cash will be footing the bill for the perks enjoyed by credit card users, including reward points, free gifts and luxury travel deals.

Businesses will also be less likely to give discounts to those paying in cash.

‘Ordinary people are going to be paying for the rich’s benefits, the holidays, the concierge service, the free gifts,’ he told Daily Mail Australia.

‘The card schemes have got everything they’ve ever wanted.

‘They’re going to hide that cost and everybody’s going to pay – and it doesn’t matter whether you bring a card, a phone or cash to the shop.’

Australian Restaurant and Café Association chief executive Wes Lambert called the decision disastrous for venues already under intense financial pressure.

‘Today was a sad day for restaurants and cafes around Australia,’ Mr Lambert said.

‘If a business does not raise its menu prices by at least what it pays in merchant fees, its profit will fall. That is not an opinion, it is simple maths.’

Lambert said the ban comes amid a perfect storm of rising costs.

‘Hospitality businesses are grappling with a global fuel crisis, weaker tourism, higher interest rates and stubborn inflation,’ he said.

‘On top of that, we are expecting a 4.5 to 6 per cent increase in award wages from 1 July, the same day payday super comes into effect.’

He warned labour costs are likely to climb further.

‘To add to the pain, the Fair Work Commission has announced a ban on junior rates for fast food,’ Mr Lambert said.

‘We expect cafes and restaurants will also be impacted by that decision in due course.’