Consumer confidence will likely take another hit unless the big banks reject a looming deadline to raise EFTPOS fees, with proposed new “interchange fees” to come into effect from 1 October.
The banks have been given the option to adopt or reject the proposed new fees, after EFTPOS Payments Australia Limited (ePAL) revealed on 8 March that all EFTPOS transactions except Coles’ and Woolworths’ would be impacted.
According to Tyro Payments, the new regime will see EFTPOS interchange fees shift from favouring consumers and small businesses, to favouring banks.
Currently, the card issuing banks contribute five cents every time a customer makes an EFTPOS transaction, but under the new pricing model they’ll charge five cents per standard transaction.
“Australia’s major banks have the opportunity to say enough is enough and to ‘break up’ with their competitors by rejecting these new charges,” Tyro Payments CEO Jost Stollmann said.
“Small business and acquirers have invested significantly in deploying 700,000 EFTPOS terminals across Australia, for the convenience of customers, but it will be the banks who stand to make a lot of money from these changes.”
According to Stollman, most Australians are unaware about the impact of such changes, because if the banks pass on those costs, “they will first hit the small shop owner.”
“But ultimately the customer will have to pay as small business will have to find ways of recovering these costs. Consumers and small businesses could be worse off and banks will be better off,” he added.
Around the world, banks are facing increased pressure to lower the interchange fees charged on debit cards. In both Canada and New Zealand, there are no debit card interchange fees, and according to Tyro for Australia to have a strong EFTPOS system, investment is required by acquirers and merchants.
“It does not need banks to stop paying and start charging by levying a fee on EFTPOS access. This is an unjust and untimely burden on Australian acquirers, merchants and consumers.”