The Council of Small Business Organisations Australia (COSBOA) has welcomed the Federal Government’s decision to extend credit card payments to the Australian Taxation Office (ATO) until June 2027, while warning that proposed surcharge restrictions could impose additional financial pressures on small businesses.
The organisation argues that the decision highlights the importance of credit cards as a cash flow management tool and raises broader questions about the costs businesses face when accepting electronic payments.
COSBOA chair Matthew Addison said the extension acknowledged the difficulties businesses could encounter if credit card payments to the ATO were discontinued.
An estimated $2 billion in ATO payments are made using credit cards, demonstrating their importance in helping businesses manage financial commitments.
“We are pleased the Government has recognised the impact this decision would have on businesses that rely on credit cards to manage their cash flow and meet their tax obligations,” Addison said.
However, he argued that the decision exposed inconsistencies in the Government’s approach to payment processing costs.
“If the cost of accepting credit card payments is significant enough for the ATO to reconsider its approach, the Government must also recognise the costs being imposed on small businesses that accept those same payments from their customers,” Addison said.
COSBOA has repeatedly expressed concerns about proposals to prohibit card payment surcharges without ensuring that reductions in merchant fees are passed on to smaller businesses.
The organisation maintains that removing surcharges could leave businesses absorbing transaction costs that would otherwise be recovered from customers.
For businesses already operating on narrow profit margins, these additional expenses could create further financial pressures.
Addison also questioned the impact of surcharge restrictions on transparency, arguing that consumers should understand the costs associated with different payment methods.
“Consumers should be able to see the cost associated with their chosen payment method and decide whether they want to incur it,” he said.
COSBOA believes the extension of ATO credit card payments provides an opportunity for the Government to develop more practical and affordable alternatives.
The organisation has indicated its willingness to work with the Government and ATO to establish suitable arrangements before the June 2027 deadline.
It argues that any changes to payment systems must consider the financial realities facing smaller businesses, particularly those relying on credit facilities to manage fluctuating cash flow.
COSBOA maintains that reducing payment processing costs, rather than transferring them to merchants, should remain a priority in future reforms.