The Australian Small Business and Family Enterprise Ombudsman has supported a recommendation for banks to reduce “tap and go” transaction fees.
The House of Representatives Standing Committee on Economics recommended that tap-and-go payments from debit cards should go through EFTPOS instead of credit. If banks have not done this by 1 April next year, says the committee, that regulatory action should be taken.
The average fee for a debit transaction is 0.26% with EFTPOS, but 0.58% with Visa or Mastercard. The fee can be higher for small businesses. Ombudsman Kate Carnell says shoppers are not given a choice, as banks don’t allow merchants to choose how the payments are processed.
“It’s estimated that processing tap-and-go transactions through credit cards instead of EFTPOS costs businesses $290 million a year,” Ms Carnell said. “Consumers and small businesses are being exploited for utilising the convenience of tap-and-go.”
She added that this made small business into “unwilling tax collectors” for banks and credit card companies. “They don’t have the negotiating power of big business to get special deals.”
ANZ told the committee they would give merchants a choice. Ms Carnell said this was encouraging, and she looked forward to seeing timelines for implementation.