Small business owners fed up with banks ‘profiteering’ on tap-and-go fees

Small business owners are calling out banks for what they say is blatant profiteering on card payment processing fees, with new research from AMP Bank GO revealing just how frustrated the sector has become.

According to the survey of more than 1,000 small business owners and sole traders, nine in 10 believe banks are pocketing too much from merchant fees (those pesky charges that hit a business every time a customer taps their card). While the fees keep rising, more than two in five admit they don’t even understand what they’re being charged for.

For many small business operators, these fees are yet another cost-of-doing-business headache they can’t escape. The choice is simple and grim: absorb the fees and watch margins disappear, bump up prices, or slap on a surcharge and cop the customer backlash.

And boy, is that backlash real. The research found that almost half of small businesses say their customers get annoyed when they’re surcharged. But without the surcharge, many owners say they simply can’t keep the lights on.

As the Reserve Bank continues its review of card payment costs and surcharging, noting consumers cough up an estimated $1.2 billion a year in surcharges,  small business owners say the system feels stacked against them.

‘We’re being fleeced’

Albury florist Renee Williams, accused banks of hiding behind “deliberately confusing” fee structures.

“I’m running my business on razor-thin margins. Meanwhile, we have no idea how much banks are making from fees. We just know they’re posting billions in annual profits,” she said. “They are profiteering from every tap we process, meanwhile we don’t understand half of what we’re being charged and we’re scrambling to keep the lights on.

“We’re the ones pouring the coffees, arranging the flowers, sponsoring the local school raffles, and keeping main streets alive. We just want a fair go – not to be fleeced by a system that profits off our survival.”

Sydney café owner Gerard Barrios said he is absorbing a staggering $14,000 a year in card payment fees. That’s money he says should be going back into the business, not disappearing into a murky payment system.

“As a small cafe, we’ve chosen to absorb the cost of card payments rather than pass on to customers, which sounds noble, until you realise we’re being ripped off by a system designed to confuse us,” he said. “I don’t even understand why I’m the one being charged.

“I’ve watched countless cafes and restaurants close in recent years, not because they weren’t good businesses, but because they couldn’t absorb an unsustainable burden that shouldn’t exist in the first place. We just want transparency and fairness, not a one-sided game.”

AMP Bank GO breaks ranks

In response to the widespread frustration, AMP Bank GO has announced a “fair go” package aimed at lowering fees and improving transparency for small business customers.

John Arnott, Director of AMP Bank GO, said the time has come for banks to treat small businesses, “the backbone of local communities and Australia’s economy” with fairness.

“AMP Bank GO is backing small businesses with three firm commitments,” he said. “A no profit pledge on card payment processing fees until 2027, a commitment to lead on price, and to provide a plain-English breakdown on fees so business owners understand exactly what they’re paying for.”

A broken system

AMP Bank Go argues that banning surcharging without actually fixing merchant fees just shifts the burden back onto small business owners, who will end up absorbing the cost or passing it on through higher prices.

Meanwhile, sketchy pricing, bundled rates, and a lack of competition mean many small owners are effectively stuck with “take it or leave it” deals. In some cases, these fees subsidise big banks’ premium rewards programs… So it’s definitely time for a shakeup

With the RBA’s review ongoing, small business owners continue to call for a fair go.

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