Australia’s card surcharge ban is changing payment fees: What should businesses know?
Synopsis
Australia’s card surcharge ban has led some QR ordering platforms to introduce new fees, leaving businesses to decide who pays.
Key highlights
- Australia’s card surcharge ban has now taken effect.
- Some cafes and pubs are introducing new “platform fees” through QR ordering systems.
- me&u and Bopple have introduced new fee structures that businesses can choose to absorb or pass on to customers.
- In some cases, customers could end up paying more than they did under the previous surcharge system.
- The changes have also raised questions about how these new fees are presented to customers.
What happened?
Less than a week after Australia’s card surcharge ban came into effect, some cafes and pubs started introducing “platform fees” when customers order through QR codes.
QR ordering platforms me&u and Bopple have introduced new fee structures, giving businesses the choice of taking the cost themselves or passing it on to customers. The two platforms calculate their fees differently. me&u charges a fixed fee based on the order value, while Bopple charges a percentage of the order.
For example, a $26 order through me&u previously attracted a 1.5 per cent card surcharge, adding 39 cents to the bill. Under the new structure, that same order could attract a 60-cent platform fee.
Some Australians have questioned whether these new fees are effectively replacing card surcharges under a different name. Me&u has denied that its new platform fee is connected to the surcharge ban.
Why it matters for businesses
This change highlights an important point, removing card surcharges does not remove the cost involved in processing the payment.
Businesses that use these platforms now have to decide what to do with these costs. They can take the fees for themselves or pass them on to the customer. Businesses that choose to pass them to customers could sometimes end up paying more than they did before the ban.
That makes share pricing in communication, even more important for businesses and customers. Customers are already sensitive to rising costs and an unexpected fee at the checkout can lead to frustration.
What founders can learn
Founders should think beyond the impact of our regulation and consider how it will actually affect their entire business. The new fee might seem small on a single transaction, but across hundreds or thousands of payments, it can have an impact on margins.
It is also worth looking at the customers' side. If a new cost is being passed on, founders need to consider not just whether they can charge it, but how they clearly explain it.
What founders can do now
- Look beyond the transaction rate and check all the fees charged by your payment and ordering platforms
- Take a few small order values and work out what the customer paid before the ban versus what they pay under the new fee structure.
- If you are passing the fee to the customers, make sure it is clearly displayed before they complete their payment.
- Compare different payment and ordering platforms. Then decide whether you want to take the money or pass it on to the customers.
The Inspirepreneur question
When such payment fees rises, who should ultimately pay them?
Source: Yahoo Finance
At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
