For Our Hours owner Alex Choi, the coming ban on credit card surcharges is arriving as one more challenge for a sector already stretched thin by rising supply chain costs, fuel surcharges and soaring ingredient prices.
"Small businesses are really feeling the squeeze," Mr Choi said. "It feels like we are absorbing all of it."
Operating a small cafe in Dickson, Mr Choi said his monthly expenses had jumped by nearly 10 per cent compared with last year. Butter prices alone rose from about $230 to more than $320 per order over the past two years, and suppliers began adding separate delivery fees to pass on the fuel surcharges.
To survive, he had to raise menu prices in July, a decision he and his wife made with deep hesitation after past customer pushback over modest price adjustments.
"Even when we put coffee up by just 30 cents, they noticed straight away ... Most customers only see the surface of the price, thinking business owners are just trying to earn more money, even though delivery, butter, flour and fuel are all going up."
Mr Choi said the proposed ban on card surcharges adds another layer of frustration, and folding transaction costs into base prices will unintentionally penalise cash buyers.
"It feels a bit unfair to cash customers who don't create any card fees," he said. "They will have to pay higher prices too ... It looks good for customers on the surface, but it's just going to drive up local inflation."
With government support programs focused primarily on green energy and new technology rather than everyday operational costs like flour, Mr Choi said he and his wife have begun discussing a future without their cafe.
"We want to keep our business, but it feels like we are just standing in one place and behind us there is nothing," Mr Choi said. "My wife and I, we discussed our future without our business ... whether it's better to just give up and sell."
His dilemma reflects a broader crisis across Canberra's small business community as traders nervously brace for the national removal of credit card surcharges on October 2026, a policy shift the ACT government said it had not studied locally.
Announced in March 2026, the federal reform will outlaw all card surcharges from October to ease cost-of-living pressures for consumers. It will also cap processing costs to stop payment providers from passing unfair expenses onto small businesses.
At Artisan Cafe, owner Matt Liu approached the reform from the opposite direction, having phased out card surcharges two years ago to build long-term loyalty with daily office workers.
"We think it's common sense that our customers should pay the exact price shown on our menu," Mr Liu said.
Mr Liu said he still pays about 1.6 per cent in transaction fees, which amount to more than $600 a month, and wholesale prices for milk and coffee beans continue to climb. In 2026, he said the cost of his coffee beans rose 5 per cent, from $30 to $31.50 per kilogram.
Artisan has absorbed those costs by relying on sales volume, but Mr Liu said he could not rule out future price increases and expected most cafes would ultimately fold transaction fees into their base pricing once the national ban takes effect.
"At the end of the day, it's still customers going to pay that amount of money," he said. "It's just a bit more clear and transparent for them, but they're still actually going to pay the same amount."
Mr Liu said if the government was serious about easing cost-of-living pressures, it should focus on lowering the underlying transaction fees with banks and payment companies, rather than simply shifting where those costs appeared on the bill.
Canberra Business Chamber chief executive Greg Harford said the policy risked driving broader economic inflation and hitting already razor-thin margins.
"Some merchants apply surcharges in order to recover the costs that are imposed on them by banks and payment providers and, while those costs are being regulated downwards, they are still likely a significant cost for many businesses," Mr Harford said.
He said for hospitality venues operating on net margins of about just 2.7 per cent, absorbing the fees simply was not an option.
"Effectively, the removal of surcharges will either mean margins are further squeezed ... or that costs are spread across all consumers, potentially putting further inflationary pressure into the economy."
Australian Small Business and Family Enterprise Ombudsman Lynda McAlary-Smith acknowledged retailer fears, saying small businesses face real administrative burdens alongside difficult choices.
"Small businesses have shared their concerns that they will be forced to either absorb the costs themselves or increase their prices and risk losing customers," Ms McAlary-Smith said.
She said traders should audit their payment arrangements and system software well ahead of the October 1 deadline.
Ms McAlary-Smith said the task goes well beyond basic card terminals, requiring traders to review point-of-sale systems, invoicing software and online platforms.
She said venues face a delicate task in customer education and businesses must clarify that "the ban only applies to card surcharges, not other surcharges such as public holiday trading surcharges".
