Australian Restaurant and Cafe Association explained that the average merchant fees businesses were expected to absorb were between 0.8 to 1 per cent. These fees used to be passed on to customers in the form of the surcharge, but will now be paid by merchants in some way, leaving them with two choices – either higher prices, or smaller profits. Mr Lambert said this “will be a shock to an industry that has margins between 2 and 3 per cent, potentially eating away at 40 per cent to 50 per cent of their profit margin”.

Council of Small Business Organisations Australia director Wes Lambert said many small businesses could not shoulder the cost. “Most just will not be able to absorb the credit and debit surcharges,” Mr Lambert said. “They will need to pass those on in the form of higher prices.”