Issue #60: Same venue, same cards. The gap is a conversation nobody has....

Last week you worked out the size of the hole. This week, the four things that close it — and the one almost nobody pulls, which is nearly free.

This is Part Two of two. If you missed Part One, the short version is three lines. Nobody passed a law. The surcharge was never your revenue. And the hole is your cost of acceptance, not what you used to collect.

Last week you pulled your September statement and worked out your blended rate. If you did not, do it before you read any further — it is ten minutes and the rest of this is abstract without it.

Here is why that number matters.

On the RBA's own averages, a small merchant on a single-rate plan pays 1.4% of transaction value. On an unblended plan, 0.9%. A large merchant, 0.6% [2].

Unblended means interchange is passed through separately rather than buried in one rate. Same venue, same terminal, same cards.

Same illustrative venue as last week. $1.2m turnover, 88% on card, $1,056,000 through the terminal.

At 1.4%, the cost of acceptance is $14,784 a year. That was the hole.

At 0.9%, it is $9,504.

The difference is $5,280 a year.

That closes more than a third of the hole without touching a single price on your menu.

Then do the price arithmetic on what is left. $9,504 across $1.2m of turnover is 0.79%.

My arithmetic on the RBA's published rates, not an RBA figure, and labelled that way on purpose.

The RBA is blunt that moving is not free. "While switching PSPs is costly, the removal of surcharging will increase incentives for merchants to switch" [1].

Changing plan with the provider you already have is usually a conversation. Changing provider is a project. Find out which one you are looking at before you assume either.

And an unblended plan is not automatically cheaper for every venue. It is cheaper on average, across a lot of merchants, on the RBA's numbers. A venue with an unusual card mix can land differently. That is what the letter below is for — you ask, they model it, you compare.

Merchant service fees across Australia run to around $7 billion a year [2]. Only 19% of small merchants are on unblended plans [2].

And then the sentence that explains the whole thing. Data from large payment providers suggests at least 90% of their merchants did not switch in 2024/25. The RBA's words: "despite many merchants paying significantly more in payment fees than their peers" [1].

Nine in ten stayed put while paying more than the venue down the road.

From 30 October 2026 the big acquirers and the networks "are required to begin publishing specified information about card payment fees" [4]. On their own websites. The first publication covers the July to September quarter [3].

The RBA says it "will republish these data on its website soon after" [4], which is the easier place to look.

Two more dates behind it. Acquirer pass-through — how much of the interchange cut actually reached merchants — by 30 January 2027. More detail on your own statement from the first full statement period beginning on or after 1 April 2027 [3].

Be clear about what Friday gives you and what it does not. It is your acquirer's averages, broken down by merchant size and card type. Not your rate. Your rate is on your own statement, and you worked it out last week.

What changes is that you now have something to hold it against.

This is the lever that got one paragraph in the trade press and no follow-up.

A weekend or public holiday surcharge is not a card surcharge, and the RBA says so in terms. The changes "only apply to surcharges added because a customer pays by card" [4]. And: "They do not apply to weekend surcharges, public holiday surcharges, or booking fees or service fees" [4].

David Bitton runs Bitton Gourmet in Rose Bay. SmartCompany reports he takes about 92% of turnover on credit cards, and that the restaurant's annual card acceptance costs can total $40,000 [8]. He raised his weekend surcharge from 10% to 12.5% rather than touch the menu [8].

In his words: "I don't have to touch my prices on food and especially takeaway coffee" [8].

But the disclosure obligation is strict, and it is the one venues fail.

The ACCC prescribes the wording. Your menu must carry this, with the brackets filled in: "A surcharge of [percentage] applies on [day or days]" [6].

And then the test almost everybody fails: "These words must be at least as prominent as the most prominent price on the menu" [6].

Small print at the bottom of the page does not pass that. The ACCC does not define prominence as point size [6]. Matching your largest price for size and weight is the safe reading, not the stated rule.

And if your menu lists no prices at all, the information "must be displayed in some other prominent way" [6]. That catches the A-frame and the counter board.

One trap to go with it. A surcharge that applies every day is not a weekend surcharge. It is part of your price, and it has to be inside the number you display. Picture a permanent 1.5% "service fee" added at the till, with the pre-fee price on the menu. That is a single-price problem whatever you call it [6].

The RBA commissioned JWS Research to ask 3,000 people in September 2025. "Over half of card users indicated they would switch to cash if offered a 1 per cent discount on a $50 transaction."

At 4%, over two-thirds [1].

That is stated intention, not measured behaviour, and I will not dress it up as more than that. But it is the best Australian evidence available and it is the regulator's own.

Operators are already circling it. Philip Barbaro told ABC News his group pays "about $150,000 in merchant fees per year". He is "currently looking at potentially giving people a discount if they pay with cash" [7].

The display rule matters here too. Payment-method discounts are allowed, and "should be clearly disclosed before consumers choose to book, order or pay" [6]. The price you display must be the full price, not the discounted one [6].

A board reading "$5 coffee, cash price" with the card price underneath in smaller type has it exactly backwards.

Worth knowing: cash was about 15% of in-person transactions in 2025, down from 69% in 2007 [1]. A cash discount is a lever on a shrinking share of your room.

Part One covered the law on this. You may raise prices to recover card costs. The risk is in the reason you give, not the rise.

The only thing to add here is the sequencing.

If you are going to raise prices, do the rate call first. Otherwise you have raised your prices to pay for a plan you had not tested. And you will not get the price back.

Four cents or six cents, on the illustrative venue above. That is the difference the rate call makes to what you have to find on the menu.

Renaming it.

The ACCC says businesses that relabel a card surcharge as another kind of fee "may be engaging in misleading conduct" [5].

The live test case is in hospitality and it is already running. The QR ordering platform me&u replaced percentage surcharging with a fixed platform fee. On a $26 order, the old 1.5% surcharge was 39 cents. The new fee for that band is 60 cents [9].

The customer pays more. The venue chooses whether to pass it on. me&u denied any connection between the fee and the surcharge ban [9].

The ACCC was asked and declined to rule. It told Yahoo Finance the changes "do not prohibit businesses from charging genuine fees for services" [9]. Its example: "such as using an ordering or booking platform" [9]. It added this. Businesses "must not mislead consumers about their prices, the nature or reason for an additional fee, or whether it is optional" [9]. The question is whether a fee is "a genuine fee for a specific service" or "in effect a card payment surcharge by another name". The answer, it says, "will depend on the individual circumstances of each case" [9].

There is no bright line yet. Which means the safe position is the plain one. If the charge only exists because they paid by card, it is a surcharge. Whatever the receipt calls it.

Back to the counter notice from Part One, and the sentence I have thought about most.

The loyalty card is finishing.

I went looking for anybody in Australia who has written about venues cutting loyalty or stamp-card programmes after the surcharge change. Trade press, the ABC, SmartCompany, Inside Retail, the submissions to the RBA.

Nothing [10].

There is coverage of the other side of it, and it is worth knowing about. The ABC reported the major banks "increasing credit card fees, reducing reward program perks and cutting back on travel insurance inclusions" [11]. That was 28 September. The cause it named was the interchange cap falling from 0.8% to 0.3% [11].

So the banks cut their loyalty programme over this too. That is the issuer side, and it is a different question from yours — but it tells you the instinct is not unusual.

I also went looking for Australian evidence on what a loyalty programme is worth to a small venue. What a stamp card actually returns, against what it costs. Everything I found was marketing published by companies that sell loyalty software, or market-size reports behind a paywall with no method shown.

So I cannot tell you that ending the loyalty card is a mistake, because nobody has measured it. And I am not going to invent a number to fill the gap, which is what most of the internet would do here.

What I can tell you is what the arithmetic has to clear.

A stamp card that gives away every tenth coffee is a 10% discount — but only on the customers who finish a card. Your card cost of 1.4% applies to almost everything that goes through the terminal [2].

Which of the two is bigger depends entirely on how many customers finish a card. That is the number nobody publishes, and it is the number your point of sale has.

If one customer in five finishes a card, the programme costs around 2% of their spend and dwarfs your card cost. If it is one in twenty, it does not. That is the arithmetic to run, and it is the only version of this that means anything.

And that is the trap in the counter notice. Two separate decisions, taken on the same day, announced on the same sign, under one reason that only covers the smaller of them.

If you are looking at your own loyalty programme this month, ask one question first. How many customers finished a card in the last ninety days, and what did they spend on the visits in between?

If you cannot answer that from your point of sale, the programme was never being managed. That is the reason to change it, and it is a better one.

Same working folder as Part One. The statements are already in there.

Add two things this week. The photographs you took on the walk-around — every sign, menu footer, web page and booking screen where a fee or surcharge is mentioned. And your menu with current prices.

Run this against the gap you measured last week. It takes your own number and puts all four levers against it in dollars. You see which one does the work before you touch a price.

You need: the gap from Part One's Replacement Ledger, your blended rate, your card turnover and your trading pattern by day.

You get back: one table ranking the four levers by how much of your gap each closes. Plus how long each takes, and what it costs you to try.

It will not tell you to raise your prices. That is your call and your accountant's.

Run this before a customer does. It checks your menu, website and booking flow against the two rules that actually catch venues. One is the single displayed price. The other is the prescribed wording for a weekend or public holiday surcharge.

You need: your menu with prices, the photographs or text of every fee notice from last week's walk-around, and your online booking and ordering screens.

You get back: a pass or fail against each rule, the exact wording to use where you fail, and the order to fix them in.

It is a checklist, not legal advice, and it says so in its own output.

Write it today, send it Friday. By 30 October the networks and the large acquirers must have begun publishing their fees [3][4]. This drafts the letter that holds your own statement against them.

You need: your most recent merchant statement and your provider's name.

You get back: a short letter, your September baseline written down, and the four figures to look for when the publication lands.

Diary it and the letter goes out while everybody else is still reading the coverage.

Pro Tip: Take this AI-generated content and add your personal touch. Change a word here, add a local reference there, include a quick story about a regular customer. The AI does the heavy lifting; you add the soul.

Three steps. The first two take twenty minutes. The third takes a fortnight and happens without you.

TThe struggling artist takes the rate they were given. It arrived in a welcome pack years ago, with a terminal and a friendly rep, and it has never been looked at since. The statement goes into the drawer unread because it is four pages of acronyms. When costs rise they raise a price, because that is the only lever they know they own. They would be genuinely shocked to learn that the venue two doors down pays less for exactly the same transaction.

The Savvy Operator treats the rate as a price like any other price. They know their blended figure to two decimal places and they know when their contract ends. They have asked their provider, in writing, to model an unblended plan on their actual card mix. They did not do it because they enjoy it. They did it because it is five thousand dollars with no customer on the other end of it. Every other five thousand dollars in this business has a customer attached.

Here is the whole thing in a line.

The rate you were given is not the rate you have.

Last week the line was that a price you have to explain is a price you have not set. This is its other half. A cost you have never tested is not a cost. It is a habit. One of them is about what you say to a customer. This one is about what you say to your bank, and only one of those conversations is uncomfortable for the person on the other side.

One more thing, and it is the reason these two issues exist at all.

Everything in Part One was about a sentence. Everything in Part Two has been about a number.

The venue that printed the notice had the sentence and not the number. That is the wrong way round, and it is the more common way round, and it is fixable in an afternoon.

Write your three questions tonight. Open one assistant. Ask all three and count the times your name comes up. Screenshot every one.

Put the number and today's date on a piece of paper, and stick it where you will see it in a month.

That is the first honest measurement of your visibility you have ever taken.

Here is the honest problem with everything above. It is another job.

You already run a kitchen, a roster, a supplier list and a family. Nobody needs a fourteenth tab open.

So do not run it yourself. Set your AI up as a second brain for the business and let it hold the detail.

Not a toy. Not a chatbot you poke when you remember it exists.

A working folder that knows your menu, your prices, your hours, your reviews and your suppliers. And the twenty questions your team answers on the phone every week.

Feed it those things once and it stops handing you ideas. It starts handing you a scoreboard.

That is why I built Strategic AI Marketing. We set your AI up properly, on your real numbers, so it thinks with your business instead of guessing at it.

You do the cooking. It does the remembering.

One, and it is free. Get your AI Visibility Snapshot. Four assistants, twelve questions about your venue, written down and dated. You will know exactly where you stand by the end of the week. It is at strategicai.marketing/free-ai-marketing-snapshot.

Two, if you want the letter done for you. Reply to this email with one word: NOTICE. Tell me your card turnover, your blended rate and who your provider is.

I will send back which of the four levers closes your gap and by how much, plus the letter to send on Friday. Written so you can send it without editing it.

No pitch deck. No discovery call unless you ask for one. One reply, one useful answer.

Next Week on The Savvy Operator: The Statement You Have Never Read. The numbers went public on Friday. We go through a real merchant statement line by line, against what the acquirers actually published. Then the four charges most venues pay without knowing what they are for.

Until then, remember. The rate you were given is not the rate you have. Serve your community. Be the operator.

Talk soon, Rowan

The Editor

The Savvy Operator

Owner of Strategic Ai Marketing

[1] Reserve Bank of Australia, Review of Merchant Card Payment Costs and Surcharging — Phase 3 Conclusions Paper, Ch. 2 "Surcharging", published 31/03/2026, read at source 19/10/2026. Source of: "at least 90 per cent of their merchants did not switch providers in the 2024/25 financial year despite many merchants paying significantly more in payment fees than their peers" and, in the same passage, "While switching PSPs is costly, the removal of surcharging will increase incentives for merchants to switch"; the JWS Research survey of 3,000 respondents, September 2025 — "Over half of card users indicated they would switch to cash if offered a 1 per cent discount on a $50 transaction", rising to over two-thirds at 4%; and cash at around 15% of in-person transactions in 2025, from 69% in 2007. The 90% figure measures merchants not switching providers, from large payment providers' own data. It does not measure whether merchants asked for a better rate, and is not used here as if it did.

[2] Reserve Bank of Australia, Conclusions Paper, Ch. 6 "Competition in Card Acquiring Services", 31/03/2026, read at source 19/10/2026. "On average, it costs a small merchant on a single-rate plan 1.4 per cent of their transaction value to accept card payments"; "a small merchant on an unblended plan would be charged a lower fee on average at 0.9 per cent"; "on average, large merchants tend to be charged lower fees (0.6 per cent of transaction value)"; "only 19 per cent of small merchants are on unblended plans"; merchant service fees "are around $7 billion per year". These are averages across many merchants, not a rate any individual venue has been offered. The chapter gives no separate figure for blended plans as distinct from single-rate plans. The per-venue dollar figures in The Brutal Math are my own arithmetic on these published rates and are labelled as such in the text.

[3] Reserve Bank of Australia, Conclusions Paper, Ch. 8 "Impact and Implementation", 31/03/2026, read at source 19/10/2026. Card networks and large acquirers: "first publication date by 30 October 2026 for the period 1 July 2026 – 30 September 2026". Acquirer interchange pass-through: "first publication date by 30 January 2027 for the period 1 October 2026 – 31 December 2026". Additional merchant statement information from 1 April 2027, applying to the first full statement period beginning on or after that date. Chapter 8 phrases the first two as a deadline — "by" — rather than an event on the day. The publication requirement covers acquirers above a size threshold, and what is published is fee information broken down by merchant size and card type, not individual merchants' rates.

[4] Reserve Bank of Australia, Conclusions Paper, FAQs, downloaded and read as source text on 19/10/2026 after a summarised read of the same page returned a sentence that is not on it. Source of: "The changes only apply to surcharges added because a customer pays by card" and "They do not apply to weekend surcharges, public holiday surcharges, or booking fees or service fees"; "Businesses can continue to offer discounts for particular payment methods"; and the implementation line "30 October 2026: Designated card networks and large acquirers are required to begin publishing specified information about card payment fees on their respective websites" together with "The RBA will republish these data on its website soon after".

[5] Australian Competition and Consumer Commission, Card surcharges (business guidance), read at source 19/10/2026. On relabelling, businesses "shouldn't try to avoid the 'no surcharge' rules" by describing a card surcharge as another type of fee, and "businesses that do this may be engaging in misleading conduct". The enforcement split is set out in Part One's references: the networks and payment providers enforce the no-surcharge rules, and the ACCC enforces the Australian Consumer Law.

[6] Australian Competition and Consumer Commission, Price displays, read at source 19/10/2026. The prescribed menu wording: "A surcharge of [percentage] applies on [day or days]", and "these words must be at least as prominent as the most prominent price on the menu". Where a menu does not list prices, the information "must be displayed in some other prominent way". On payment-method discounts: "payment method discounts should be clearly disclosed before consumers choose to book, order or pay"; the displayed price "must be the full price the consumer will pay" without the discount; businesses "may also display the discounted price, but if they do, they must display it alongside the full price", and must not display only the discounted price or make it more prominent. The ACCC does not define prominence in point sizes. The "match your largest price" instruction in this issue is my reading of the safe position, and is labelled as such.

[7] ABC News, Danuta Kozaki, "NSW small businesses contend with how to cover merchant fees after card surcharge ban", 11/10/2026, read at source 19/10/2026. Philip Barbaro, Sydney hospitality operator: "For the group, we pay about $150,000 in merchant fees per year" and "I am currently looking at potentially giving people a discount if they pay with cash". The article also carries an ACCC statement that businesses "must not mislead consumers about their prices or the reasons for any price changes", and that payment-method discounts "should be clearly disclosed before consumers choose to book, order or pay".

[8] SmartCompany, David Adams, "Cash only, or grin and bear it: Businesses brace for the surcharge ban", 29/09/2026, read at source 19/10/2026. David Bitton, Bitton Gourmet, Rose Bay: about 92% of turnover taken on credit cards; annual card acceptance costs that can total $40,000 — reported by SmartCompany in indirect speech, not quoted, and paraphrased in this issue for that reason; weekend surcharge raised from 10% to 12.5%; "I don't have to touch my prices on food and especially takeaway coffee". He rejected cash-only as not logistically favourable. The three businesses in the same article that did stop taking cards — a salon, an aesthetic clinic and a dog trainer — are not hospitality.

[9] Yahoo Finance Australia, Sophie Venz, 05/10/2026, read at source 19/10/2026. On a $26 order through me&u, the previous 1.5% surcharge was $0.39; the platform fee that replaced it is $0.60, the fixed rate for orders between $25 and $49.99. The venue decides whether to pass it on. me&u denied any connection between the platform fee and the surcharge ban. The ACCC told Yahoo Finance that the changes "do not prohibit businesses from charging genuine fees for services such as using an ordering or booking platform", that businesses "must not mislead consumers about their prices, the nature or reason for an additional fee, or whether it is optional", and that whether a fee "is a genuine fee for a specific service, or is in effect a card payment surcharge by another name, will depend on the individual circumstances of each case" — it declined to rule on this example.

[10] An absence, stated as one. No Australian published source links the card surcharge change to merchant loyalty or stamp-card programmes being withdrawn, and none publishes traceable Australian figures on what a loyalty programme returns a small venue. Searched across trade press, the ABC, SmartCompany, Inside Retail and the RBA submission record, 12/10/2026 and again 19/10/2026. Everything located on loyalty economics was marketing published by loyalty software vendors, or market-size reports with no method published. Bank and card-issuer rewards being cut over the same reform have been covered — see [11]. That is a different question. The counter notice described in Part One is my own first-hand observation, photographed and dated, and is not corroborated by any published reporting because there is none.

[11] ABC News, Adelaide Miller, "Rewards programs and insurance perks in firing line after changes to bank surcharging rules", 28/09/2026, read at source 19/10/2026. "In preparation for these changes, the major Australian banks are increasing credit card fees, reducing reward program perks and cutting back on travel insurance inclusions." The article names the Commonwealth Bank's change to its Qantas Frequent Flyer association and its in-house Yello rewards scheme, and attributes the pressure to the interchange cap falling "from 0.8 per cent to 0.3 per cent". This is the issuer side of loyalty, not the merchant side. It does not corroborate anything about venues and is not offered as if it does.

Strategic AI Marketing's own citation record — 0/12 on 26/05/2026 and every reading since — is published at strategicai.marketing/we-did-this/.