ASBFEO calls for lower “tap-and-go” transaction fees
(13 December 2017 – Australia) The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has supported a parliamentary committee recommendation for banks to reduce “tap-and-go” transaction fees.
According to East & Partners’ Australian Merchant Payments Program, The proportion of surcharging merchants levelled out slightly over 2016 following several of years of rapid growth. Just under half of all Australian merchants now apply a surcharge (49.8 percent) with a further 15.5 percent intending to do so.
A significantly higher number of Institutional enterprises surcharge compared to other segments (77.9 percent), on average 1.42 percent of transaction values and jumping by eight percent since 2014. What is even more concerning is that Institutional enterprises are also charged the lowest fees by issuers at an average of 0.92 percent, almost half the level of Micro businesses (1.61 percent).
In a statement, Ombudsman Kate Carnell said, “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.
“Shoppers aren’t given a choice with PayWave, as banks don’t allow merchants to choose the route through which contactless payments are processed,” she added. “It’s estimated that processing tap-and-go transactions through credit cards instead of EFTPOS costs businesses A$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.”