The landscape for Australian small businesses is shifting rapidly. From the looming ban on credit card surcharges to the

ATO's move toward monthly GST reporting, the pressure on cash flow has never been higher. In this episode, we unpack why these changes are more than just administrative updates and how they could signal a significant financial challenge for your business.

We explore the controversial nature of the 2026 credit card fee changes and why the honest majority might be paying the price for a few bad actors. With bank branches closing and ATMs disappearing, we are being forced into a cashless system

where the financial institutions hold all the cards. Darren shares his insights from 30 years as a liquidator on why waiting for the red flags to multiply is the biggest mistake a business owner can make.

If you have noticed your costs are starting to outstrip the value of your business, this conversation is a must-listen. We break down the importance of early intervention and why a restructure does not always mean closing your doors. Learn how to identify the triggers that mean it is time to put up your hand for help and what options are available before you reach a point of no return.

What You Will Learn:

• Why the 2026 ban on credit card surcharges is a major threat to retail margins

• How the shift to a cashless society is benefiting banks at the expense of small business

• Why the ATO is moving non-compliant businesses to monthly GST reporting

• What the circular link between rising fees and inflation means for your price ceiling

• Why early intervention provides more options than formal insolvency

Notable Quotes:

• Whatever the fees are that will be charged will need to be absorbed into a business as an overhead cost.

• We are being forced to use cards, but we have to pay for the privilege.

• Early intervention is the key for a successful restructure or turnaround.

• The cost of doing business is actually outstripping the value of the business.

Key Takeaways:

• Businesses must prepare for October 2026 when credit card fees can no longer be passed to customers.

• High-volume transactional businesses like retail and online trading will be hit hardest by fee absorption.

• Monthly GST reporting is being used by the ATO as a tool to force compliance and identify financial distress early.

• Interest rate hikes mean the capital funded by mortgages is costing small businesses significantly more.

• A successful restructure requires the support of all stakeholders, with the ATO often being the largest.

Who Should Listen: Business owners, company directors, lawyers, accountants, and anyone wanting to understand financial distress warning signs.

About the Host:

Darren Vardy - Managing Director of Insolvency Options and Registered Liquidator with over 30 years of experience in business recovery and debt solutions. Darren has helped thousands of businesses and individuals navigate financial distress and find practical solutions to complex problems.

Connect With Us:

• Website: insolvencyoptions.com.au  • Phone: 1800 463 328 • LinkedIn: https://www.linkedin.com/in/darrenvardy/

Subscribe & Follow:

Don't miss future episodes! Subscribe to i.O. - Insolvency Options

Like this episode? Please leave a review and share with colleagues who might benefit from these insights.

Co-host: Anthony Perl

Produced by: Podcasts Done For You

#SmallBusinessAustralia #InsolvencyOptions #CashFlow #BusinessRestructure #CreditCardFees #ATOCompliance #FinancialHealth #RegisteredLiquidator

Credit card fee changes, the next cashflow

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pressure for small businesses.

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Welcome to IO and Solvency Options with

Darren Vardy, the managing director

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of Insolvency Options and a registered

liquidator with over 30 years of

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experience helping businesses and

individuals navigate financial challenges.

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In today's episode, Darren explains

how upcoming changes to credit card

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surcharges could create a significant

new cost pressure for small businesses.

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He explores why high transaction

businesses, retailers, online operators,

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and businesses with fixed overheads may

be hit the hardest, and why pricing,

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cashflow, GST compliance, and early

intervention all need to be reviewed

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before pressure turns into crisis.

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I'm your co-host Anthony Pearl.

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Let's dive into unlocking

more about insolvency options.

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Darren, I know we spoke in a

previous episode about changes in

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superannuation, but now we're gonna

talk about another big change that's

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going to impact small business.

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It's going to impact then the general

public as well, is changes in the way

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credit card fees are being charged.

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It's a significant change, isn't it?

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Darren Vardy: Look, it is.

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From 1 October 2026, businesses

will no longer be able to charge

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credit card fees for transactions

to enable them to receive income.

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So what we'll find is that whatever

the fees are that will be charged

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will need to be absorbed into a

business as an overhead cost directly

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linked to the level of income that is

being achieved by a business owner.

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Anthony Perl: I think these changes,

would it be fair to say they're

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controversial in the significance

of what they're doing and what the

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damage it might do to small business?

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Darren Vardy: Look, I think it

is controversial, absolutely.

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I think there were circumstances there

where small businesses were profiteering

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on the charges and charging more than

what they were being charged, and I

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think that this is a reaction to that.

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Not sure that I agree that it's the

right reaction that ought to be taken.

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Yeah,

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Anthony Perl: you would've thought

that the obvious thing would've been

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to have made that a really obvious

thing and an obligation, and even put

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it on the credit cards as being…

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Which often do.

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I know in small business that you can

just say, "Well, here is the credit

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card fee," and you can see that it

is a separate line item and put in

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there, and it's often charged by the

credit card company directly anyway.

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So it's one of those things where it is

a little bit easier, particularly, you

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know, in the professional services space

and some of those ones where you've got a

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bit of time where you're paying invoice.

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I get it's a bit harder to convey

maybe in a retail kind of environment

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or hospitality environment.

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So some of us paying the price for what

a small percentage are doing wrong?

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Darren Vardy: Potentially, yeah.

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And, you know, you, you made an

interesting point there as a separate fee.

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I know having recently gone to a local

ATM to withdraw some money, and only to

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find after I'd withdrawn the money, to

find that there was actually two entries.

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One was the amount that I'd

withdrawn, and the second entry

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was the actual transaction fee.

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Now, maybe that is the better way of

where it could be handled, whereas

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the transaction amount goes to the

provider of the goods or service,

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business owner, and the transaction

fee is a separate fee which goes

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directly to the financial institution.

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That to me sounds like a reasonable

and plausible way of dealing with

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it so that the business owner, A, is

not impugned by the cost, but also

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is completely not actually within the

transaction system, and it doesn't

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impact his business per se whatsoever.

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I

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Anthony Perl: just had a recent

conversation with someone where

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it's kind of explained that the

big winners here are really the

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credit card companies, aren't they?

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Because you've got a choice as a small

business that you either now have to

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raise your prices to accommodate this,

which is hard with inflation, or you

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lose, but the credit card company wins.

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And I think the circumstance where they

win, particularly if you're selling

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an item for $100 and you have a 1.4%

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that you've got to pay, so

it should really be $101.40.

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But the problem is if you

raise your price to $101.40,

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technically the credit card company

are gonna benefit by a few cents

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extra on top of that Because the 1.4%

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is now on the slightly larger amount, so

they're the big winners in this, and the

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small businesses are going to struggle

to be able to now justify saying, "Well,

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our price was this, but we're gonna have

to make it this in order to counter it."

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Darren Vardy: Yeah.

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And look, the small business need to look

at their income and look at their prices,

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in my view, on a regular basis because

they need to make sure they're able to

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cover costs and make a reasonable profit.

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However, in circumstances like this

where there is an amount paid on every

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dollar that is income for the credit

card charge or the transaction fee to be

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absorbed by a small business, we're moving

into an area where it becomes circular.

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The income or the price

needs to be increased.

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That leads to increased inflation.

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That then in turn leads to increase

in supply costs for a business,

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and we're actually finding that

costs of doing business is actually

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outstripping the value of the business.

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And we'll get to a stage where prices

will hit a ceiling, but the costs to

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produce or the cost of, for, of income

will continue to rise, and that's where

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you'll get to a situation of getting

into a financial hardship scenario

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Anthony Perl: Do you think there are

industries where this is going to

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hit them harder than perhaps others?

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Darren Vardy: Look, I think any high

transactional businesses, you know,

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retail, online trading and the like,

and where there are businesses with

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some high fixed costs where they can't

pivot and change their cost base as

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quickly as some other businesses.

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It'll be those types of businesses

that'll probably be impacted the most.

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Anthony Perl: What's interesting is

that we've rapidly moved over the last

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few years to almost being cashless,

that we're all operating using cards

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and people are carrying less and

less physical cash around as well.

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Is this, in a sense, a way to

potentially encourage a reverse of

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that so that we end up with a bit more

cash actually flowing into the economy?

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And how important is that?

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Darren Vardy: I think the problem is,

is that we're being driven down…

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society is being driven down this road

whereby we're, we've been told to use

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our debit cards and our credit cards.

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A lot of businesses don't accept

cash anymore, and been a whole

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societal change around that.

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But that has come at a cost, and

the financial institutions are

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those that are benefiting from it.

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And what we're finding is that my local

bank, rather, has just closed, and having

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gone up to what I thought would still

be an ATM available, there was no ATM

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available, hence the need for me to go to

an alternate and pay a larger transaction

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fee to pull it out of a generic ATM.

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So as a society, we are being

forced to use cards, but we've

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got to pay for the privilege.

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And the question's got to be is, well,

what service do we get out of it when

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with all the bank closures that have

been happening and the difficulties

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in trying to get hold of banking

staff on the phone to deal with any

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what should be a routine inquiry?

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Anthony Perl: Yeah, it's a really

interesting conundrum for small businesses

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and for individuals operating here.

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And as you said in the beginning,

the, the big winners here are the

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credit card companies for sure.

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They're going to benefit more

than perhaps anyone else.

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And, you know, I know this is probably

a question a bit left field, but does

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this also push people into becoming

more available to taking on the likes

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of crypto and other such things?

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Is that where we're going to see s-

some shifts and almost being pushed

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in that direction because of this?

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Darren Vardy: Yeah, look, I don't know

about crypto insofar as I think that

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there's still a lot of unknown around

crypto, around the security and the like.

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But having said that, when I was

in search of an ATM the other day,

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there was a crypto ATM in the local

convenience store, and not a regular ATM.

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So I sense that, yes, there could

be a move towards that, particularly

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generations younger than ours.

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I

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Anthony Perl: mean, when we talk about the

sort of the cashflow crunch and the impact

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that it's having, and you start talking

about interest rate rises as well, that

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we've started to see consecutive ones of

those and predictions of more to come.

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So these things are putting more

and more pressure on businesses

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everywhere, and again, the

combination of all of this activity.

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Are you expecting to see, you know,

more people knocking on your door?

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Darren Vardy: I am expecting to see

more people knocking on the door.

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We've had continual interest rate hikes.

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We all know that a lot of small businesses

are funded from mortgage finance, so

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therefore their capital that's in their

business is now costing them more.

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Again, another cost that needs to be

dealt with, and if the business simply

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can't afford that cost, its only option

is then to wind down and wind up.

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And so unfortunately, I do foresee

in these times that there will

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be more people walking through

my door as a result of that.

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Anthony Perl: And for those people

that are listening that may be in that

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situation, particularly also lawyers,

accountants, that may be listening in

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and be aware of businesses that they're

dealing with that may be forced into

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this situation or heading in that,

down that path, how soon is too soon

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for them to contact someone like you?

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Because your path is not always going to

lead them down into shutting the doors.

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You're gonna try and keep them

operating as best you can.

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Darren Vardy: Yeah.

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Look, early intervention is the key for

a successful restructure or a turnaround.

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So really, the sooner the better is

probably the slogan when it comes

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to people identifying that there is

a financial issue they need to deal

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with, because there are so many more

options available, which may not even

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be a, an insolvency option per se.

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It may just need to be a debt restructure.

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But certainly, there are far more

options available at the early

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stage of a financial or cash flow

issue than there are months later.

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Anthony Perl: And just to pile things on

a little bit, for certain amount of small

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businesses that may already be facing

pain, for those that have been a little

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bit non-compliant, if that's a nice way

of terming it, as far as GST reporting

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is concerned, there's been some shifts

in that space as well, isn't there?

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Darren Vardy: Yeah, there has.

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You know, what we've seen over the

last 12 months is that, i- is a

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move from quarterly GST reporting to

monthly GST reporting and payment.

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The ATO went through a review of

all its businesses that were showing

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signs of history of non-compliance.

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And they progressively moved

them to a monthly GST reporting.

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Now, a number of those businesses have

managed to sustain that transition, and

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I might add, with the help from the ATO

in providing some repayment plans over

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time, they've managed to transition to a

monthly GST reporting, look at their cash

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flow, get back on their feet, and get

their business in order to comply with

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not only the future obligations, monthly

obligations, but the historical debt.

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What has come with that is that

there is also a number of businesses

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that've been unable to meet those

obligations and have fallen foul of

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their financial distress and ended

up into, in external administration.

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And maybe the ATO, in taking that

action, in moving businesses to a

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monthly GST from quarterly, was needed

to happen to deal with those businesses

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that, where they were never able

to pay the outstanding obligations.

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But it forced them to stop any

future accruing obligations

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which would not be paid.

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Anthony Perl: Yeah.

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Part of the problem is, is that

it's knowing when to stop, isn't it?

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Because small business owners typically

are quite determined, and that's why

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they started the business in the first

place, so knowing when the point is that

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you've got to, A, put up your hand for

help, and B, be told enough is enough.

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Having those triggers and things

in there in place is important.

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And, and that just, not just small

business, that's businesses of all sizes.

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Darren Vardy: Yes.

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No, that's correct.

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And it could be said that, you know,

the ATO, for some of these businesses,

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have actually done them good justice for

helping them realize the situation they're

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in and to, for want of a better term,

put an end to it, one way or another.

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Anthony Perl: And I imagine, just kind

of to wrap things up, and I guess this

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carries back to a previous episode where

we talked about superannuation as well,

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that if you look at the changes that

have happened with superannuation, you

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look at the changes with, as we've just

talked about, with the GST payments,

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you look at changes in interest rates,

you look at changes in the credit cards.

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These are red flags that I gather you're

going to be looking at when someone knocks

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on your door straight away and saying,

"These are the things that are possibly

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causing some of these red flags," and

where to start looking at, at where the

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problems are and then how to address them.

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Darren Vardy: Yeah, that's exactly right.

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You know, so, you know, these are

the key things that we look at is, is

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what is the compliance history like?

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Because for a restructure or a turnaround

to be successful, you need the support of

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all stakeholders, and generally the ATO

is one of the largest stakeholders in,

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in any particular turnaround scenario.

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Anthony Perl: Well, that's all for

this episode of IO Insolvency Options,

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but next time Darren will look at

the construction industry and the

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insolvency pressures affecting builders,

suppliers, trades, and homeowners.

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He'll unpack what happens when project

home builders collapse, why homeowner

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warranty insurance matters, and how fixed

price contracts, rising supply costs, and

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late intervention can create devastating

consequences across the whole sector.

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We've created a workbook for the episode

with some questions for you to answer,

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key quotes, and action steps to follow.

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Check out the show notes for

the link to download your copy.

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For details on how to get in touch

with Darren and his team on insolvency

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challenges, please consult the show notes.

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This podcast is produced by my

team at podcastdoneforyou.com.au,

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helping professionals share

their expertise through

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powerful podcast content.

234

If you found value in today's

episode, wherever you're tuning

235

in, please like, comment, and

subscribe to IO Insolvency Options.

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Until next time, remember, there's always

a way forward when you know your options.