I’m an Aussie running more than a dozen cafes in the UK and this is the infuriating thing businesses need to change back home

An Australian expat who runs more than a dozen cafes in London has called on businesses back home to absorb the cost of card surcharges rather than passing them on to customers.

Huw Wardrope, co-founder of Urban Baristas, said Australia is behind the ball in limiting card surcharges for customers after the European Union and Britain banned them in early 2018.

The 44-year-old is instead ‘bearing the cost’ of card payments at his 15 locations and even doubled down on going cashless despite initial resistance from locals.

‘I have sympathy for pubs, especially pubs in Britain. “I know it’s a difficult thing, but I think it’s time (for Australia) to move with the times,” Mr Wardrope told the newspaper. Daily Telegraph.

Urban Baristas has continued to grow despite paying fees to process card payments, and is opening four more ‘Aussie-style’ cafes next year.

The businessman supported the Albanian government’s plan to crack down on merchant charges for customers who pay by card.

Inserting a card to use Eftpos typically costs merchants less than 0.5 percent of the sale, while using contactless Visa and Mastercard payments can cost 0.5 to 1 percent each for debit cards and 1 to 1.5 percent for credit cards.

Customers are often passed on the costs, which are estimated to cost just under $1 billion a year, according to data from the Reserve Bank of Australia.

The government announced the plan to tighten surcharges on debit cards in October, but remains vague about how to tackle credit card charges.

Treasurer Jim Chalmers said the government is prepared to ban debit card surcharges from early 2026, pending further consultation with the RBA.

“Consumers should not be penalized for using cards or digital payments, and at the same time, small businesses should not have to pay high fees just to get paid,” he said.

‘We are prepared to ban surcharges on debit cards, subject to further work from the Reserve Bank and safeguards to ensure small businesses and consumers can both benefit from lower costs.’

On a $100 purchase, the average added cost is 28c for EFTPOS, 52c for using the Mastercard network, 47c for using Visa and $1.88 for digital payment provider Square.

A small business owner described the financial challenges he faces with digital payments in a Facebook post.

“I run a small business, we used Square to take Eftpos last year, it cost us 40,000 in fees, we just can’t absorb the costs. Cash is king,” they wrote.

Finder’s head of consumer research Graham Cooke said the long-term trends are not against cash being used, even if it is cheaper.

The United Kingdom and the European Union banned merchants from passing on card payment fees to customers in 2018 (stock image)

“It appears Australians are opting for the convenience of plastic, even if they have to pay these costs,” he said.

The government was also not exempt from the fees and was found to have illegally charged the Aussies billions over 20 years.

The issue came to light after the NSW government became aware that 92 million transactions since 2016 had racked up $144 million in illegal merchant fees.

According to Finance Minister Katy Gallagher, Commonwealth law prohibits the government from collecting payment surcharges when people pay taxes or fees.

Ms Gallagher said in a statement that the Albanian government would legislate to stop passing on debit surcharges from the ATO and Services Australia from January 1.

“This new legislation will give the Chancellor of the Exchequer the power to change Commonwealth surcharge policies quickly and efficiently, including to prevent Commonwealth agencies from passing on debit card surcharges,” she said.

“These bills will not impose new surcharges, but will solve the historic problem of ensuring that existing surcharges are authorized by legislation.”