Two in three (66%) Australian small businesses expect costs to rise under new card payment rules, while 44% plan to increase prices.
- 66% of Australian small businesses surveyed expect the surcharge ban to increase their costs, with 61% concerned about how the change will impact their business over the next 12 months.
- 44% plan to increase prices, compared with just 23% planning to absorb the additional payment costs.
- Hospitality businesses in particular are feeling the pressure, with 51% planning to raise prices.
The new card surcharge ban may not deliver the savings consumers were promised, with a survey by small business lender OnDeck Australia finding almost half of businesses plan to increase prices in response.
The ban, which took effecti on 1 October 2026, was designed to help consumers collectively save $1.6 billion in card surcharges – or around $80 annually for each card-using consumer. However, businesses still incur costs for accepting card payments.
With those costs needing to be absorbed, offset or passed on elsewhere, the initiative is increasingly criticised as flawed, threatening to leave both businesses and consumers worse off.
An OnDeck poll of 253 Australian small businesses spanning retail, hospitality, ecommerce and service-based sectors found 66% expect the changes to increase their business costs, including 23% that expect costs to increase “significantly”.
Rather than absorbing those costs, 44% of businesses surveyed said they plan to increase prices to help cover the additional expense, making price rises the most common response to the new rules.
Only 23% said they planned to absorb the additional payment costs, while 17% said they would encourage customers towards lower-cost payment methods, 13% would review or renegotiate payment-provider fees and 12% would look to reduce costs elsewhere in their business.
Concern about the impact of the surcharge ban remains widespread, with 61% of businesses surveyed by OnDeck concerned about how it will affect their business over the next 12 months, including 21% who say they are “very concerned”.
The pressure is particularly evident in hospitality. Close to seven in ten (69%) of hospitality businesses surveyed expect their costs to increase, while 51% plan to increase prices, and 65% are concerned about the impact of the ban on their business over the next 12 months.
OnDeck Australia CEO Cameron Poolman said the survey shows the new rules simply shift the cost rather than removing it.
“The idea that this would be a win for consumers ignores how businesses operate,” Poolman said.
“For many businesses, merchant fees are a real operating cost. If the business can no longer recover that cost at the point of payment, it has to recover it somewhere else. If the cost of payment is simply built into the price of the coffee, the customer is still paying for it.
“The bigger concern is what happens when thousands of businesses make the same decision. At a time when inflation is already elevated and interest rates are rising, further price increases risk adding to inflationary and cost-of-living pressures rather than relieving them.”
ATO move adds another cash flow challenge
The change comes as Australian businesses face another shift in how they manage payments and cash flow. The Australian Taxation Office (ATO) initially announced it will stop accepting credit card payments after 30 November 2026, meaning businesses that currently use credit cards to meet tax obligations or manage the timing of cash outflows would need to move to another payment method.
Demonstrating how ill-conceived the change was for Australia’s small businesses, Federal Treasurer Jim Chalmers, stepped in on 9 October, acknowledging that the ATO’s timeframe was “inadequate”, and ensuring the ATO will continue accepting credit cards until 30 June 2027. However, this only buys time for small businesses.
Poolman said this development highlights the need for Canberra to consider how policy changes affect Australian small businesses.
“There is a certain irony in businesses being told they should absorb card-processing costs, when even the ATO decided it wouldn’t accept credit card payments.
“For small business owners already dealing with elevated operating expenses and continued pressure on margins, expecting them to absorb merchant fees is a big ask. Removing a payment option that some use to manage short-term cash flow is yet another blow for many small businesses.
“When policy settings make cash flow harder for small businesses, they need other options. Small business lenders like OnDeck provide working capital when businesses need it.”
Survey findings
The OnDeck Australia-commissioned survey of 253 Australian businesses primarily across retail, hospitality, ecommerce and service-based sectors found:
- 66% expect the card surcharge ban to increase their business costs.
- 23% expect their costs to increase significantly.
- 61% are concerned about how the card surcharge ban will affect their business over the next 12 months.
- 44% plan to increase prices to help cover the cost.
- 23% plan to absorb the additional payment costs.
- 17% plan to encourage customers to use lower-cost payment methods.
- 13% plan to review or renegotiate their payment-provider fees.
- 12% plan to reduce costs elsewhere in their business.
- Among hospitality businesses, 69% expect their costs to increase, 51% plan to increase prices and 65% are concerned about the impact on their business.
Methodology
The research, commissioned by OnDeck Australia and conducted by Octopus Research between 28 September and 5 October 2026, surveyed 253 Australian businesses primarily across retail, hospitality, ecommerce, and service-based sectors. Respondents included businesses operating across Australian states and territories, including metropolitan and regional locations. Percentages for planned responses to the surcharge ban may total more than 100% because respondents could select multiple options.
About OnDeck
OnDeck is a small business lending specialist dedicated to simplifying and streamlining business finance. OnDeck offers lightning-fast, unsecured business loans from $10,000 to $300,000*. Learn more at ondeck.com.au
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