The Australian Restaurant & Cafe Association (ARCA) has launched a campaign opposing the Reserve Bank of Australia’s (RBA) proposed ban on credit and debit card surcharges, arguing the move could backfire on consumers and devastate an already struggling hospitality sector.
ARCA unveiled its “Let’s Get This Right, Not Rushed” initiative this week, urging the RBA to slow down its review process and warning that 81% of restaurants and cafés currently passing on payment surcharges would be forced to raise menu prices if the ban takes effect as planned in July 2026.
“Don’t let the RBA take away your choice, or you’ll be left with a lot less than you think,” said Wes Lambert, ARCA’s CEO, in a message to consumers. “If surcharges are banned, prices will simply rise across the board.”
The timing is particularly concerning given Australia’s current inflation environment. According to ARCA, the ‘Meals Out & Takeaway’ category rose 3.3% year-on-year in August 2025, marking the strongest annual increase in the past year.
“We urge the Government to encourage the RBA to slow down. We are calling on the RBA to pause the review so industry and payment providers can fully work through the consequences,” Lambert said.
He questioned the logic behind the rushed timeline, noting that while the government made an election promise to ban surcharges, it has at least 2.5 years to implement the policy.
Lambert also challenged the RBA’s projections, citing the Governor’s acknowledgement that consumers ultimately bear the costs regardless of how they’re structured.
“Even the RBA Governor has acknowledged consumers ultimately pay — so where exactly will the $1.2 billion in ‘savings’ come from?” Lambert said.
ARCA contends that the original proposal to ban only debit surcharges was already burdensome, but expanding it to include credit cards goes too far. The association warns that a blanket ban would eliminate choice for cash payers and low-cost debit users who currently can avoid fees, while forcing all customers to subsidise high-cost credit card transactions through higher menu prices.
The industry association also points to international markets where surcharge bans exist, noting that effective merchant costs can exceed 2% in those jurisdictions.
ARCA is calling on the government to encourage the RBA to pause its review, giving the industry and payment providers time to understand the consequences fully. The association’s primary concern is ensuring that any reduction in merchant fees doesn’t simply result in payment processors introducing new charges that offset the savings.
“It’s critical that the RBA takes time to ensure that the corresponding cuts to underlying merchant fees don’t lead to increased costs to small businesses from other fees and charges,” the association stated in its announcement.
