Restaurants and cafes across the country disagree with the Albanese government’s proposal to ban the surcharging of debit card payments and warned menu prices would have to rise to protect thin profit margins in the hospitality industry.

The Australian Restaurant & Cafe Association, in the first submission to the Reserve Bank’s payments consultation, said the move would put more pressure on inflation as costs are recovered in other ways. It would also jack up surcharges on credit cards, which are outside the proposed ban. Almost 40 per cent of restaurant meals are paid for on a credit card.