In short:
Major reforms to the way banks and businesses can bill and surcharge for credit and debit transactions came into effect this week.
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banks → bill → effect
Some businesses are not aware while others are modifying their prices to looking at workarounds.
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others → modify → workarounds
The reforms by the Reserve Bank kicked off on October 1.
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reforms → kick → October
Despite the Reserve Bank's sweeping reforms on credit and debit card surcharging, which is meant to save customers about $1.6 billion annually, businesses are finding workarounds to recoup fees still paid to the banks.
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businesses → sweep → banks
While the cap on interchange fees paid from businesses to banks on credit card fees has reduced, there are still fees that can't be passed on to customers.
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that → pay → customers
Salon owner Sheridan Shaw said she has been forced to increase her pricing.
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she → say → pricing
"Being able to absorb that cost would be detrimental to our business currently," she said.
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she → absorb → business
The revised fees from banks and payment providers will now be factored into her pricing, and using direct debit bank transfers to avoid fees is not an option for her.
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using → factor → her
"We need to accommodate our client that is already struggling with their finances," she said.
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she → need → finances
"[But] there's no way that we would personally do a pay ID bank transfer because from a reconciliation perspective and having to chase a customer for a failed payment, that is my worst nightmare when it comes to our client experience."
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it → be → experience
The hairdressing sector's peak body said hairdressers across the country were concerned about having to raise prices and the risk of upsetting customers and consequently losing business.
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hairdressers → say → business
"There is some fear, and I suppose where that comes from is the ... conversation that has to happen with their clients," Australian Hairdressing Council's chief executive Fiona Beamish said.
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executive → be → clients
"The clients are expecting to now not be charged this particular surcharge ... but it is really tough on business to be able to communicate [a price rise].
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it → expect → rise
The Reserve Bank maintains the reduction of interchange fees will save businesses $910 million a year, but the Australian Chamber of Commerce and Industry (ACCI) disagrees.
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Chamber → maintain → Commerce
"The reality is that for small businesses in particular, this won't save them money," its chief executive Andrew McKellar said.
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executive → save → money
"There are no real winners in any of this because the costs will still be there.
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costs → be → this
Some small businesses are going to have to absorb those costs, and in some cases, it's just going be passed through still to consumers."
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it → go → consumers
Mr McKellar has also slammed the ATO for announcing a ban on credit card payments from November 30.
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McKellar → slam → November
"It's unacceptable, it's a staggering double standard that demonstrates a complete lack and concern and care for what small businesses are going through," he said.
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he → demonstrate → what
Restaurant owner Peter Papas has increased his prices, and he is worried some customers will walk away.
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customers → increase → prices
"We've got a lot of support but at the end of the day, when people can't pay anymore, they stop showing up," he said.
"Venues will likely raise item prices beyond the exact micro-percentage of the previous surcharge due to price rounding.
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Venues → get → rounding
For example, they might increase the price of coffee from $4.80 to a flat fee of $5.00.
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they → increase → 5.00
While some businesses were exploring discounts for paying in cash, he said, for his business, that was not possible.
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that → explore → business
"Offering cash discounts or banning certain credit cards is impractical and denies the consumer the flexibility of paying however they wish," he said.
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he → offer → flexibility
"The irony in all of this now is that if you are wanting to pay cash as a customer, you are now subsidising credit card infrastructure providers, because everyone has adjusted their menu."
Consumers have mixed responses; some aren't happy about price increases, while others understand why small businesses have adjusted costs.
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businesses → want → costs
"Yeah look it's not great, because obviously businesses then feel like they need to increase their prices," one woman told ABC News.
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woman → look → News
"I don't notice the charges as they come through so I doubt it will change my buying habits," another man said.
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man → notice → habits
The impact on housing
For big projects like housing construction the payment changes were likely to have flow on impacts to overall pricing, Simon Croft from the Housing Industry Association warned.
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Croft → have → Association
"If manufacturers, suppliers and merchants can no longer recover payment processing costs through surcharges, there is a risk those costs become embedded in the underlying price of building materials, products and services," he said.
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he → recover → materials
"Any additional cost entering the supply chain ultimately adds pressure to housing affordability.
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cost → enter → affordability
"
While most direct payments were made via bank transfer that avoided fees, Mr Croft said, residential construction was built around fewer, but significantly higher-value transactions.
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construction → make → transactions
This meant even small payment fees could add up when it was applied to high cost products.
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it → mean → products
"There remains significant unknowns about how a credit card surcharge ban would operate in practice,"Mr Croft said.
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Croft → remain → unknowns
"Governments' focus should be on reducing the underlying cost of payments and the broader cost of doing business, particularly for small businesses.
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focus → reduce → businesses
"
Up until now, the ACCC has been responsible for enforcing surcharging provisions in the Competition and Consumer Act 2010.
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ACCC → enforce → Act
From today, the card networks and payment service providers are responsible for enforcing the rules.
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networks → enforce → rules
The Aporia
