How the card surcharge ban could change our relationship with cash

With the Reserve Bank of Australia's (RBA) ban on card surcharges now in effect you might start seeing local businesses offering discounts if you pay in cash.

Cash payments in Australia are much less common than they were a decade ago, but the RBA's latest data showed a slight uptick in cash use in 2025.

How could the ban on card surcharges impact how cash is used in Australia?

How often do people use cash?

This graph from the RBA's 2025 Consumer Payments Survey tracks the percentage of Australians who use cash in a typical week.

As you can see, 2025's figure of 50 per cent is much lower than the 97 per cent in 2007.

But it's slightly higher than 2022's figure of 47 per cent.

Will we move back to cash?

John Hawkins, a senior economic lecturer at the University of Canberra, doesn't expect cash use to skyrocket.

"From January the government has required most grocery stores and petrol stations to accept cash, which may see some modest increase in its use," Dr Hawkins says.

"On the other hand, about 20 per cent of consumers say they used cash to avoid card surcharges.

"As these no longer apply we could see some drop in cash use."

Angel Zhong, a finance professor at RMIT, says she would be surprised if the surcharge ban reverses the long-term trend of card payments.

"I expect a modest uptick [in cash use] mostly at the margins: the café, the barber or the tradie offering a few per cent off for cash," Professor Zhong says.

"Australians moved to cards and mobile wallets mainly because of convenience, speed and record keeping, not because of price.

"A small discount at a handful of businesses is unlikely to change entrenched habits for most people."

Data from the RBA's 2025 survey showed people aged 65 and older were the most likely to use cash.

Cash might also still be preferred by people in regional areas with limited bank access or poor internet signal, people managing tight budgets, and people who have privacy concerns.

Professor Zhong says the goal should be to continue offering people the choice of using cash or paying by card.

Why would cafés offer cash discounts?

Professor Zhong sees cash discounts as a sign of how much pressure small businesses are under.

"The RBA paired the ban with a cut to interchange fees, which was meant to soften the blow by lowering what businesses pay to accept cards," she says.

"But interchange is only one part of the cost.

"Small businesses typically pay their payment service provider a bundled rate, and there's no guarantee that the interchange savings flow through to that rate."

While big businesses could leverage their bargaining power to negotiate savings in their contracts, smaller businesses don't have that option.

And that means losing the ability to surcharge while missing out on a drop in costs.

"Against thin margins and rising operating costs, offering a discount for cash is one of the few ways a small business can steer customers toward a cheaper payment method," Professor Zhong says.

Are cash discounts legal?

Yes.

The Australian Competition and Consumer Commission (ACCC) says businesses can offer discounts to customers paying via particular means such as cash or PayID, but there are a few rules.

Discounts should be clearly disclosed before payment and they have to advertise the non-discounted price.

They're not allowed to display the discounted price more prominently than the full price.

Is it legal to hike prices to cover the surcharge ban?

Yes, but there are rules about how businesses label these price hikes.

"They must not mislead consumers about prices, including about the reasons for any price increases," the ACCC says.

An example of this might be a nursery that used to apply a 1 per cent credit card surcharge for its products.

To compensate for that cost, they might increase the cost of a $10 pot plant to $10.10.

But let's say the nursery owner decides that, while they're setting new figures, they'll increase the pot plant's price to $12 to cover the rise in their electricity and water bills.

That's totally legal too.

But they aren't allowed to say the price increase from $10 to $12 is because of the ban.

"This will be misleading because the price increase also reflects other business costs, not just the cost of accepting card payments," the ACCC says.