Australians were promised simpler payments and fewer fees when card surcharges were banned, but one month on, consumers may not be better off.

The ban, which came into effect on October 1, removed the ability for businesses to charge customers an additional fee for using most debit and credit cards.

WATCH THE VIDEO ABOVE: Card surcharge ban sees prices rise instead

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But while the surcharge has disappeared from receipts, the cost of accepting card payments has not.

Businesses typically pay between one and two per cent every time they accept a card payment, leaving them to decide whether to absorb the expense or pass it on through higher prices. 

Canstar Data Insights Director Sally Tindall said the changes have improved price transperency, but warned consumers should not mistake that for genuine savings.

“When the RBA announced this rule, it did say that Australians pay $1.6 billion in card surcharges in a year,” Tindall told Sunrise.

“I think there’s a lot of people, including the Prime Minister, who thought that we would be saving $1.6 billion.

“But it’s not because the cost still exists. Shops still have to pay it.

“What has happened is transparency. We’re now comparing apples for apples. The shelf price you see is the price you’ll pay at the checkout.

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“So that has removed the bugbear off our backs. But it doesn’t mean we’re saving money.”

While the ban has increased transparency, Canstar’s Sally Tindall said Australians aren’t necessarily saving money. Credit: Sunrise

Coffee prices jump

Tindall’s team has been examining receipts from consumers around the country, identifying key ways businesses had responded to the changes.

Some have simply incorporated the previous surcharge into their advertised prices, meaning customers are now paying more upfront.

Others have used the changes as an opportunity to introduce price increases that go beyond the cost of the former surcharge.

“Small Flat White have done some really good research on their website. They’ve found that 20% of cafes have put up their coffee prices since the ban came into effect,” Tindall said.

“The average increase or the typical increase, 50 cents, which is a lot more than the actual surcharge.”

On a $5 coffee, that represents a 10 per cent price increase.

Tindall cautioned against directing frustration towards small businesses, saying many were already struggling with rising operating costs.

“Instead of hiking their prices every time a cost increase happens, comes their way, 10 times a year or something, they actually save it up,” she said.

“So what this has done is kind of triggered some shops to initiate a price rise that partly is the surcharge, but partially reflective of the cost of goods and services going up.”

However, some businesses have chosen to absorb the additional costs, at least for now.

Could cash make a comeback?

The changes could create and unexpected incentive for Australians to return to cash.

While customers paying by card and cash will now generally face the same advertised price, Tindall said businesses could begin offering discounts to customers who pay with physcial money.

“Watch this space. I think stores might have to get innovative,” Tindall said.