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Cashless risk exposed as Aussie mum slugged with ‘ridiculous’ surcharge to pay with card

You might tap your card without thinking, but not looking deeper could cost you.

A Queensland mother was slugged with a “ridiculous” surcharge simply for using her card to pay for her birthday lunch, and experts have warned this will be the reality for more Australians as the use of cash declines.

Alera used a QR code on the table to order and pay when she shared a meal with her husband at Surfers Pavilion on the Gold Coast on Wednesday. She had no idea she was being hit with a $7.80 surcharge - 10 per cent of the bill - until she checked the invoice emailed to her.

“There was still another fee on top of that, a processing fee,” she told Yahoo Finance. “I thought it was a mistake and they’d look and give us a refund or a free drink, but the waiter said, ‘Oh no that’s our Eftpos fee’.

Cashless societies are facing bigger risks of surcharges like this, which Queensland mum Alera said was 'ridiculous'.
Cashless societies are facing bigger risks of surcharges like this, which Queensland mum Alera said was 'ridiculous'. (Yahoo Finance)

Have you been hit with a ridiculous charge? Or worry about cash use in Australia? Contact

“If that was just me paying at the bar, I probably wouldn’t have thought anything of it and I would just tap away, but I had the receipt emailed to me and could see it.”



Alera said she had already paid the surcharge before realising it was being applied.

“I would love to know how they are getting away with that. Do they want people to pay with cash? It’s just exorbitant.”

There is a ban on excessive surcharging in Australia, which applies to Eftpos, MasterCard and Visa. It means customers can't be charged more than the business has to pay. But that's not always the case. And despite this, recent analysis by Canstar found Australians were paying an average of $140 a year in surcharges for opting to use electronic payments over cash.

That adds up to $4 billion - a $400 million increase on the year before.

Aussies cop creeping fees as cash starts to vanish

“There are places that excessively surcharge and it's actually in breach of the law,” Canstar group executive Steve Mickenbecker told Yahoo Finance.

“There is a cap on the amount you can surcharge and the merchant can only recover the cost of the transaction. No one charges a merchant service fee of 10 per cent. It's just not done.”

Mickenbecker said the average fee for a Visa or MasterCard debit card was 0.5 per cent and 0.89 per cent for a credit card.

“In small businesses, they might be paying 2 per cent, potentially more, but it’s nowhere near 10 per cent,” he said.


Professor Steve Worthington, of Swinburne’s School of Business and Law, said excessive surcharging was on the rise, and Australians were more vulnerable now the use of cash was in decline and, in some businesses, flat-out not accepted.

“I am a strong believer in the value of cash and I think that’s one of the attractions, there’s no surcharges on cash,” he told Yahoo Finance.

“Many merchants don’t let people know there is a surcharge, and certainly don’t tell people the cost of that surcharge. 10 per cent is just really outrageous.”

Worthington said businesses struggling with the rising cost of electronic payments needed to reflect that in their standard pricing, not through an extra charge.

“We are being asked to pay part of the electricity and part of the water and part of the wages, [and] now for payments. But these are costs that should be embedded in their prices,” he said.

“Surcharging seems to be a bit of an easy way of catching a little bit of extra money and must stop.”

The Australian Competition and Consumer Commission (ACCC) oversees allegations of overcharging and told Yahoo Finance businesses have to prove their costs if they implement a surcharge and have to follow rules about advising consumers up front.

"Consumers that have concerns about a business charging an excessive payment surcharge, can raise the issue directly with the business. They can also make a report to the ACCC about alleged excessive surcharges," a spokesperson said.

Cash was king

The debate about the access to cash has raged in Australia of late, with passionate defenders claiming bank closures and ATMs vanishing is to the determinant of customers.

Some businesses simply don’t accept cash anymore due to the rising cost of handling physical currency and, in some cases, the risk to staff when it’s on site.

The Reserve Bank (RBA) said the number of Aussies paying with cash had more than halved in the past three years, from 27 per cent to just 13 per cent, and banks are using the trend to justify the closure of physical branches.

Interestingly, a recent report found Australians were increasingly stashing cash, with the RBA estimating between $56 billion and $81 billion was hidden away in households. That accounts for about 55 to 80 per cent of physical bills. In comparison, between 9 and 26 per cent was used for physical transactions.

A rise in mobile technology, like Apple Pay, has accelerated a transition to cashless transactions, with mobile payments "particularly pronounced" for purchases below $50.

Some have called for similar legislation to that now being proposed in Ireland, which requires a minimum number of ATMs and places like supermarkets, pharmacies and convenience stores to ensure cash is in store.

Yahoo Finance contacted Surfers Pavilion for comment but received no response before publication.

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