The Australian Small Business and Family Enterprise Ombudsman has supported a parliamentary committee recommendation for banks to reduce “tap and go” transaction fees.
The House of Representatives Standing Committee on Economics recommended that banks let merchants send tap-and-go payments from debit cards through eftpos instead of credit.
The committee said if banks have not done this by 1 April 2018 that regulatory action should be taken. Ombudsman Kate Carnell has welcomed the recommendation.
“The average total merchant fee for a debit transaction is 0.26 per cent with eftpos and 0.58 per cent with Visa or Mastercard and it’s higher for small businesses,” Carnell said. “Shoppers aren’t given a choice with pay wave, as banks don’t allow merchants to choose the route through which contactless payments are processed. It’s estimated that processing tap-and-go transactions through credit cards instead of eftpos costs businesses $290 million a year.”
Carnell said she was encouraged that ANZ told the committee they would give merchants a choice and said she looked forward to seeing timelines for implementation.
“Consumers and small businesses are being exploited for utilising the convenience of tap-and-go,” Carnell said. “Small businesses are unwilling tax collectors for banks and international credit card companies. They don’t have the negotiating power of big business to get special deals. As we move towards a cashless economy it’s vital that transaction fees are kept as low as possible.”
