CBA enables contactless payments to run over cheaper eftpos network
(2 July 2019 – Australia) CBA has confirmed it has now switched on Merchant Choice Routing, also known as Least Cost Routing, enabling merchants to direct tap-and-go payments through eftpos.
The move follows a regulatory push to control how both banks and international card schemes take their clip of electronic payments by dictating how they flow.
While consumers don’t necessarily feel the initial pinch on tap transactions, merchants have struggled to get contactless and other payments to run over the cheaper eftpos network rather than paying higher charges to Visa and Mastercard.
CBAs large footprint among SMEs has meant their fleet of Albert and Leo terminals are regarded as a strategically important element in the push to open up competition in the contactless payments market.
“CBA’s solution adds another level of flexibility and control by enabling businesses to choose different routing options and use a combination for multi-network debit cards”, the bank said in a statement.
For example, a business can set a transaction threshold limit to route payments to their chosen primary network (eftpos, Mastercard or Visa) and transactions up to and above the threshold limit will be processed by their secondary network of choice.