Breaking News Today

‘Tap and go’ payments fuelling retail apocalypse: report

Published: (Updated: ) in Australian News by .

Four of Australia’s leading retail associations have joined together to fight against a bank practice they claim is partly responsible for fueling the country’s “retail apocalypse“.

Four of Australia's leading retail associations have joined together to fight against a bank practice they claim is partly responsible for fueling the country's "retail apocalypse".

The so-called Fairer Merchant Fees Alliance - compromising of the Australian Convenience and Petroleum Marketers Association, the Australian Retailers Association, the Council of Small Business Australia and Master Grocers Australia – has taken aim at 'tap and go' card transactions.

The group claim consumers and retailers are getting "unfairly hit by high fees for 'tap and go' card transactions" which are "often automatically routed through expensive international payment networks", resulting in hundreds of millions of dollars in hidden fees.

"The costs are either passed on to consumers as a surcharge or higher prices or reduce the merchant's bottom line – hitting consumers' wallets while damaging Australian businesses, especially in the under-pressure retail sector," the Fairer Merchant Fees Alliance explained.

The alliance claims a system, known as Least Cost Routing (LCR), could ensure every 'tap and go' card payment is sent through the lowest cost network for that particular transaction.

However, the group argue big banks reluctant to implement the technology.

Australian Retailers Association executive director Russell Zimmerman said it was disgusting to see banks fighting against a solution that could keep retailers afloat.

"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," Mr Zimmerman 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.

READ:  Man tasered in the face during arrest
Retail worker gets the ultimate revenge on rude customer at Christmas

In a recently released Issues Paper regarding its Review of Retail Payments Regulation, the Reserve Bank of Australia echoed the sentiments.

"For most merchants, payments by eftpos can be significantly cheaper for them to accept than payments via the international schemes," it wrote.

"None of the major banks has taken advantage of the ability to implement LCR 'in the background' as a way to offer improved pricing for smaller and medium-sized merchants on simple merchant plans".

The Fairer Merchant Fees Alliance is calling on the banks, regulators and government to fix the system in the countdown to the Reserve Bank of Australia's Review of Retail Payments Regulation.

Source: 9News https://www.9news.com.au/national/retail-news-tap-and-go-payments-under-fire-from-fairer-merchant-fees-alliance/a1813ffe-f4f7-4cc5-9fa2-9c0d83eed01c

Shares
Share This
Finance Advice 2021