The Reserve Bank of Australia and the ACCC have made it clear. The ban on card surcharges is coming, and small businesses will no longer be able to recover the cost of accepting card payments through a surcharge. In place of that, retailers have been told they can offer a discount to customers who choose to pay by cash.
That suggestion misses the reality of running a small shop.
Cash is not free. It carries a higher processing cost, especially as bank branches close. It carries a higher theft risk. It takes more time to count, reconcile and bank. For many independent retailers, card acceptance costs less than one per cent.
A one per cent cash discount will not shift customer behaviour. Shoppers will look for something closer to ten per cent. To offer that, a retailer would need to lift prices to create the margin, which is not workable and would not be legal in the way it has been described.
The framing feels tone-deaf. It reads as if the policymakers involved have not stood behind a small business counter and worked out what a change like this actually costs.
Small business retailers should be able to pass on a real business cost that they carry. Big businesses that compete with them have very different card acceptance economics. The playing field just tilted further.
So what should an independent shop actually do?
First, review the current card processing arrangement. Fees vary widely. Group buying power, of the sort newsXpress arranges for members, can materially reduce the cost per transaction.
Second, look for margin on the shop floor rather than at the payment terminal. Small increases in average transaction value, achieved through better counter placement, a stronger add-on offer or improved ranging, will more than offset a percentage point of card cost.
Third, watch pricing on the top selling lines. Even small, considered adjustments on the right lines, applied thoughtfully, can absorb the shift without customers noticing.
Fourth, tell the story. Customers respect independent shops that are honest about the cost of doing business. Signage, socials and conversation all matter.
newsXpress helps its members in two ways on this issue. It funds lobbying to represent the interests of independent small business retailers. And it helps members access lower-cost card processing arrangements so the underlying cost is smaller in the first place.
Find out more: help@newsxpress.com.au
