It’s October 1, 2026. Surcharging to recover costs associated with how a customer chooses to pay is banned from today.
I am angry about what the ban on payment surcharges does to small business lottery retailers.
I am angrier still at the cheering. Commentators, lobbyists, media outlets and politicians of all sides have lined up to applaud the RBA for a move that hurts small business.
A real business cost is being dumped on retailers who work on a fixed, tiny margin, and we are expected to join in the applause.
From today, the major card networks’ no-surcharge rules take effect under the framework enabled by the RBA’s changes. Lottery retailers who have used surcharging to recover their payment costs lose that option. They keep the bill.
This move by the RBA is a tax on these local small retail businesses. The government does not collect it. A policy decision imposes it, and it comes straight out of the money they use to pay their bills and themselves.
A 1% fee can take 10% of the margin
Take a retailer who processes $100 in lottery sales by card and earns $10 in commission. A $1 payment processing fee takes 10% of that commission.
A commentator sees a 1% fee. The retailer sees a tenth of their income on those sales disappear, before wages, rent, electricity, insurance and everything else it takes to keep the doors open.
The real figures vary. Commission rates differ, payment fees differ, and so does the mix of cash and card. But this is how a fee that looks small from the outside can eat around a tenth of the gross margin on the lottery sales concerned.
If you think that is trivial, try taking the same cut to your own income. Then tell a small business owner to stop complaining.
“Put your prices up” is a useless answer
The ACCC says businesses can recover payment costs through their overall pricing. What use is that to a retailer who does not set the price?
Lottery ticket prices are fixed. Changing them requires approval from state regulators or governments, as The Lottery Corporation pointed out in its submission to the RBA. A retailer cannot adjust the price because the merchant bill has landed on them alone.
Charging more for something else in the shop? I do not accept that either. Why should the customer buying a greeting card pay for someone else’s lottery transaction?
Yes, the RBA’s package lowers the interchange fee caps. Good. A lower cost is still a cost, though, and whatever is left has to come from somewhere.
The cheer squad
It frustrates me how readily the small business owner’s income is treated as the easy answer. Let them absorb it. Let them work out how to make ends meet. Just do not let them spoil the good-news story.
The commentators, lobbyists, media outlets and politicians cheering this on have had their moment. They got the headline about savings at the counter. Not one of them has to find the money.
So own the consequence. You cannot celebrate the saving for the customer and ignore the retailer paying for it. If you backed this, you backed the cost that comes with it.
To the RBA and the ACCC: a lottery retailer on a fixed margin deserves a better answer than advice to recover costs through prices they are not allowed to set. These are real businesses. They are more than an awkward footnote to a tidy policy announcement.
You can all sleep well tonight. For the retailers facing the arithmetic above, the result is effectively a tax of around 10% of their gross margin on card-paid lottery sales. They can stay up working out how to cover it.
Well done, all. What a way to back small business.
A note to the politicians: when the next election rolls around and you say small business is the backbone of our economy, your laziness on this surcharge ban will show what you really think – that you don’t care about small business.
You have hit the nail on the head. They don’t care about us at all. Idiots. I am not going to accept credit cards for Casket tickets.
My Tatts rep said it was not their problem. I don’t have a choice but to stop taking cards for payments and this will probably see some customers go online. They want that of course.