Four of Australia’s top retail associations have joined forces to call for cheaper ‘tap and go’ fees for merchants, claiming unfair hidden fees.
The Australian Convenience and Petroleum Marketers Association (ACAPMA), the Australian Retailers Association (ARA), the Council of Small Business Australia (COSBOA) and Master Grocers Australia (MGA) have teamed up to form the Fairer Merhant Fees Alliance, ahead of the Reserve Bank’s Review of Retail Payments Regulation.
The group claim Australian retailers are charged fees to the tune of “hundreds of millions” annually, as ‘tap and go’ transactions are regularly routed through international payment networks.
Small businesses are particularly hard-hit by the fees, they claim, with these often passed on to consumers through added surcharges and higher prices to recoup costs.
The FMFA have proposed a ‘Least Cost Routing’ system, whereby ‘tap and go’ payments would be sent through the lowest cost network available for each unique transaction, be it international, eftpos or a domestic network.
COSBOA CEO Peter Strong said they would be seeking a fairer option for all.
“We’ve formed the Alliance to push hard on this,” he said, “The fee gouging is harmful to businesses, and the banks should be doing much more to educate their customers, give them options and save money for everyone.”
While ARA executive director Russell Zimmerman said it was a particularly prudent move in the current retail climate.
“With several retailers advising that they are insolvent, and many Australian retailers concerned about reduced profits, dealing with exorbitant fees forced on them by the banks is a problem they should not have to face,” he said.
“Australian retail needs the banks to step up, do the right thing for the retail industry, and offer Least Cost Routing to all retailers large and small.”
In their Review of Retail Payments Regulation issued in November last year, the RBA identified card payments to be the most popular payment method in Australia.
And in 2018/19 alone, 10 billion debit and credit card payments were made, totally $678 billion. And where once cash was the go-to for small payments, they found we are increasingly putting these on card too. And in the same period, there were $4.3 billion paid in merchant fees on card payments.