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eftpos

The surcharge ban is not why prices are going up

Turn on the news or scroll social media and you will see the claim that businesses are lifting prices because they can no longer surcharge card payments.

That is not what is happening.

Look at what small business retailers are facing in 2026:

  • Labour costs are up 5% this year.
  • Rent is up 5%, often more, this year.
  • Insurance is up 10%, often more, this year.
  • Energy is up 10% and more this year.
  • Freight to land stock in-store is up between 25% and 100% this year.

Every one of these feeds into a price decision. And every one of these has increased this year.

Labour and rent are the biggest costs in a retail business. Together they often make up more than 25% of total costs. When both rise in the same year, most shops cannot absorb it.

Then there is freight. Shoppers never see it. But if it costs a third more, or double, to get a carton of greeting cards or gifts onto the shelf, that cost has to go somewhere.

None of these costs arrive on their own. A retailer might wear a rent increase one year and an insurance jump the next. In 2026 they all landed at once. Most independent shops run on thin margins, and there is only so much a business owner can cut from rostering or trading hours before customers notice. At some point the price on the shelf has to move.

Losing the surcharge does cost retailers money. I accept that. It is still the smallest of the factors behind any price rise I have seen this year.

The news outlets running the surcharge story are showing how little they understand about running a shop. It’s lazy reporting.

if you’re a journalist and prepping a story on the removal of the  EFTPOS surcharge and its impact on price rises, do your job – ask questions, find out what is really driving price increases.

I have spent more than 40 years working with independent retailers. I have not met one who lifts prices without thinking hard about how customers will react.

My advice to retailers is simple. Know your cost increases line by line, so that when a customer asks why something costs more, you can give them a straight answer.

7 likes
Newsagency management

Well done RBA and those who have cheered you on, you’ve just taxed small business lottery retailers.

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.

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Social responsibility

Card surcharging ends tomorrow

The EFTPOS pitches keep coming, so here is my warning, again.

Getting ready for the new rules and choosing a payment provider are separate decisions. Do not rush either.

What changes tomorrow

From 1 October 2026, surcharging is generally prohibited on eftpos, Mastercard and Visa debit, prepaid and credit cards, unless an exemption applies. American Express is also removing surcharging. Your card costs remain, so cover them in your pricing.

Interchange caps fall to 8 cents or 0.16% for debit and prepaid, and 0.3% for consumer credit. These cap interchange, not your total merchant fee. What matters is your actual bill.

Who makes money from the pitch?

The promoter may be paid if you sign. That could be a POS company, a group earning a referral fee or a comparison service. It does not make the plan bad. It does mean the interest should be disclosed.

Four questions before you sign

  • Who gets paid, and how much? Get it in writing.
  • What will it cost from 1 October? Use your actual transactions and include every fee.
  • How do interchange cuts reach me? For cost-plus, ask what is passed through and what margin is added.
  • What happens later? Ask about introductory rates, fee changes and exit costs.

Urgency is not an answer.

My position

I have no financial interest in this. My business Stride Retail Pty Ltd (newsXpress) does not make anything whatsoever from EFTPOS recommendations or transactions.

I want retailers paying the lowest practical total cost.

What to do today

  • If you surcharge: Switch it off on terminals, POS and online checkout. Update signs and brief staff.
  • Check your margin: Adjust prices where needed.
  • Get claims in writing: Then check your October statement against what was promised.

Who makes money from the recommendation? A good deal will stand up to that question.

2 likes
Newsagency management

Payments providers are chasing newsagents. My advice: don’t rush

Payments providers are chasing newsagents right now. Suncorp Bank exiting this space has plenty of newsagents thinking about what to do next, and the providers know it. The calls and emails have started, and reps are turning up in shops.

My advice is to not rush into a decision.

It is still early days. I know of three deals being pitched to newsagents right now, and I know of more options being prepared that are not public yet. Better deals may emerge. In my experience of moments like this, they usually do.

There is time, too. The new regulations banning surcharging start October 1. That sounds close, but for a decision like this it is not. You can watch the market for a few more weeks and still have plenty of time to move comfortably before the deadline. Nobody should feel pressured into signing with the first rep who calls.

When you do compare offers, look past the headline rate. What is the total cost per transaction once every fee is counted? What is the contract term, and what does it cost to leave early? Who owns the terminal, and who answers the phone when it stops working on a Saturday morning? When does the money land in your account? Cash flow depends on that last one more than people expect. Whatever answers you get, get them in writing.

Most of all, think about, and ask questions about, who is making money from the decision you make. Every deal being pitched earns someone a margin somewhere. Maybe the provider, maybe a referral partner earning a commission along the way. Once you know who gets paid and how much, you can judge whose interests the deal really serves.

This is not a criticism of the providers. They are doing what businesses do. But it is your decision and your money. Waiting a few weeks costs you little. A bad contract can cost you for years.

Take your time.  Do your research. The right decision could save you a ton of money, which will matter after October 1. So, be careful, do your due diligence. Ask the tough questions. Sign only when you are sure.

7 likes
Newsagency management
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