“Small restaurants and cafes will not be able to pass on merchant fees they continue to pay banks and payment providers. We expect menu prices will increase on October 1 and for any business that does not pass costs on, their profit will drop,” said Australian Restaurant and Cafe Association chief executive Wes Lambert. “Consumers will now pay $5.10 for a coffee that used to cost them $5.08, and the biggest losers are cash payers.”

The Australian Restaurant and Cafe Association has urged hospitality operators nationwide to introduce a temporary surcharge on breakfast, lunch and dinner services to cover higher expenses they were copping to plate up meals.

Employers and high-profile restaurateurs have backed a minimum wage rise aligned with inflation for 2.6 million workers, warning that anything above the consumer price index risks making the economy unsustainable.