Small businesses face pressure to raise prices after surcharge ban

Summarised from 2 outlets · Updated 13 Nov, 22:02 · Archive

Small Australian businesses are under pressure to raise prices as higher borrowing costs, rent and wages squeeze margins following a card surcharge ban.

Small Australian businesses are struggling with mounting pressures on their finances and may raise prices to stay afloat. Rent, power and wage bills are squeezing margins, while a fifth interest rate hike and disruptions to fuel and supply chains from the Middle East war are adding to the burden, even as household spending weakens and the broader economy slows.

The pressures intensified when a ban on debit and credit card surcharges came into effect six weeks ago on 1 October. Cafes, restaurants and other hospitality and retail businesses that previously charged customers surcharges have had to absorb these costs themselves.

According to Nigel Lee, head of payments provider Tyro which serves about 80,000 merchants, many expected to offset the surcharge loss through price increases. However, actual behaviour was more cautious. Tyro found that only 9.4 per cent of merchants that had been surcharging increased prices in the first week after the ban, though this rose to 12.4 per cent by three weeks later. Of those that did increase prices, 61 per cent raised them by more than the surcharge amount, suggesting businesses are trying to manage multiple cost pressures simultaneously.

How it is being reported

• Price rises coming as small businesses juggle costsSmall businesses are under pressure to raise prices as higher borrowing costs hit, despite many holding steady after a card surcharge ban took effect.The West Australian · 13 Nov, 21:31
• Price rises coming as small businesses juggle costsSmall businesses are under pressure to raise prices as higher borrowing costs hit, despite many holding steady after a card surcharge ban took effect.Perth Now · 13 Nov, 21:31

In this story: Australia · Tyro · Nigel Lee · Middle East

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