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Handwritten sign reveals grim truth of how much cashless change costs you

Aussies are collectively spending $4 billion a year on card surcharges and this cafe has revealed how it works on a micro level.

Cafe sign next to woman tapping her card on card machine
A cafe installed a sign begging for customers to use cash and revealed how much surcharges were costing them. (Source: Facebook/Getty)

A cafe has installed a sign to remind customers exactly what using a card to pay can cost. Most Australians overwhelmingly prefer to tap and go rather than use their cold-hard cash.

But there's a downside to this cashless revolution and it's not a cheap affair. The cafe claimed a week's worth of card surcharges amounted to a staff member's daily wage.

Paying between 0.5 to 1.9 per cent every time you tap and go might only be a few cents, but it certainly adds up. Australians collectively paid $1 billion on surcharges last year.


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.

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."

The Reserve Bank of Australia (RBA) has previously noted small businesses were being stung by the rising cost of using card services. But this is also the case for cash, which is expensive to handle.

Richard Holden, Professor of Economics at UNSW Business School said Australia told Yahoo Finance using cash from a “system perspective is costly and a hassle”.

“If you run a café, cash handling is a giant pain. You’ve got to have insurance, you've got to bundle it up at the end of the day and take it to a night safe. It takes staff time and it costs money,” he said.

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.”

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Pet groomer Jackie van der Merwe told Yahoo Finance she only passes on half of the cost to customers and the cost overall has "certainly gone up in the last couple of years".

There are plenty of benefits for small businesses to carry and accept cash.

They aren't affected if there's a system or power outage related to card terminals and it ensures instant cash flow as digital payments can sometimes have delays.

Going cashless can alienate some cash-carrying customers and businesses don't have to worry about paying hundreds of dollars for fancy card equipment.

Letitia Thomas, who runs the Smokey Cape Supabake bakery in NSW, told Yahoo Finance being cash-only is perfect for her.

"We don't have those extra fees [associated with card purchases]," she said. "The girls are serving customers quicker as well."

Social media has been awash with images of Australian businesses asking for customers to pay in cash and some even offer discounts of up to 50 per cent if they hand over physical money.

A vocal group pushing for the use of cash to be protected are having a second protest on Friday.

Like earlier in the year, they have called on people to pull out cash to show banks that it still matters.

Unfortunately, the Australian Banking Association said this made "no material difference" on April 2.

“Whilst Australians are using less and less cash, we are not going to be cashless. Australians don’t need to change their behaviour when it comes to withdrawing cash, it will continue to be available and accessible to those who wish to use it," the banking association said.

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