An Australian expat who runs more than a dozen cafes in London has called on businesses in his country to bear the cost of card surcharges rather than passing them on to customers.
Urban Baristas co-founder Huw Wardrope said Australia is behind limiting card surcharges for customers after the European Union and the United Kingdom banned them in early 2018.
Instead, the 44-year-old “bears the cost” of card payments at his 15 establishments and doubled down even in the face of initial opposition from locals by not using cash.
“I feel sorry for cafes, especially those in the UK. I know it’s a tough business, but I think it’s time (for Australia) to move with the times,” Mr Wardrope told the Daily Telegraph.
Urban Baristas has continued to grow even paying fees to process card payments and will open four more Australian-style cafes next year.
The businessman backed the Albanian government’s plan to crack down on merchant charges for customers paying by card.
Inserting a card to use Eftpos typically costs merchants less than 0.5 percent of the sale, using Visa and Mastercard contactless payment can amount to between 0.5 and 1 percent each time for debit cards and between 1 percent and 1.5 percent for credit cards.
Customers are often passed on for the charge which is estimated to cost just under $1 billion a year according to data from the Reserve Bank of Australia.
An Australian expat who runs a successful cafe chain in London, Huw Wardrope (pictured), said businesses in his country should stop charging customers card surcharges.
The government announced the plan to target debit card surcharges in October, but remains vague on addressing credit card charges.
Treasurer Jim Chalmers said the government was prepared to ban debit card surcharges from early 2026, pending further consultation with the RBA.
“Consumers shouldn’t be punished for using cards or digital payments, and at the same time, small businesses shouldn’t have to pay high fees just to get paid,” he said.
“We are prepared to ban debit card surcharges, subject to further work by the Reserve Bank and safeguards to ensure both small businesses and consumers can benefit from lower costs.”
On a $100 purchase, the average added cost is 28c for EFTPOS, 52c to use the Mastercard network, 47c to use Visa and $1.88 for digital payments provider Square.
A small business owner described the financial trouble he’s in with digital payments in a Facebook post.
‘I run a small business we used Square to acquire Eftpos last year, it cost us 40,000 fees, we just can’t absorb the costs. Cash is king,’ they wrote.
Finder’s head of consumer research Graham Cooke said the long-term trend is to move away from using cash, even if it is cheaper.
The United Kingdom and the European Union banned merchants from passing on card payment charges to customers in 2018 (file image)
“It seems Australians are choosing the convenience of plastic even though they have to pay these fees,” he said.
The government was also not immune to tariffs and was found to have illegally collected billions from Australians over two decades.
The issue came to light after the New South Wales government realized that 92 million transactions had attracted $144 million in illegal trading fees since 2016.
Commonwealth laws prohibit the government from charging payment surcharges when people pay a tax or levy, according to Finance Minister Katy Gallagher.
Gallagher said in a statement that the Albanese government would legislate to stop passing on debit surcharges from the ATO and Services Australia from January 1.
“This new legislation will provide the Minister of Finance with the power to quickly and efficiently amend the Commonwealth’s surcharge policies, including to prevent Commonwealth agencies from imposing surcharges on debit cards,” he said.
“These bills will not impose new surcharges, but they will fix the historic problem of ensuring that existing surcharges are authorized by legislation.”