Cautious welcome for more choice on tap and go

The Australian Retailers Association (ARA) has welcomed greater choice for retailers on tap and go payments, but urges more action.

The ARA says it’s “pleased” that ANZ and Westpac have decided to give retailers a choice on how tap and go debit-card transactions are processed.

But although it’s a “step forward”, says ARA Executive Director Russell Zimmerman, there’s “still a long way to go”.

25 cents’ worth

Currently, ANZ charges retailers about 25 cents to process contactless debit-card payments through eftpos. Visa and Mastercard impose a fee of roughly one per cent of the value on a transaction.

Mr Zimmerman cautiously welcomed the banks’ announcement. But he also says there’s plenty more to do before merchants with higher-value-average transaction tickets see any marginal reductions in costs.

“Contactless payments were first introduced into Australia 13 years ago,” he said. “Since then, major banks have automatically routed contactless debit-card transactions through higher-cost processing platforms such as Visa and Mastercard. The extra costs have been borne by retailers and merchants.

“The banks’ approach is a step forward for retailers and merchants across Australia. However, the ARA is disappointed that the banks have only gone half way by offering merchants an ‘opt-in model’. They haven’t supported ‘least cost routing’, as urged by the RBA Payments System Board.”

Turbo Tyro

Mr Zimmerman says he can’t understand why the major banks have been unable to introduce ‘least cost routing’.

“Although ANZ bank says it’s committed to working towards ‘least cost routing’, it’s difficult to understand why ANZ was unable to achieve it. By contrast, Tyro, a small acquirer, was able to accomplish this in about three months.

“Furthermore, the ARA is perplexed as to why NAB and the CBA are still silent on this issue.”

The ARA says it strongly encourages merchants to consider routing debit transactions via the eftpos network. Doing so, is says, would “secure the vibrancy of the Australian retail industry and the sustainability of the economy”.

Mr Zimmeran added: “eftpos make significant contributions to the vitality of the Australian economy. Therefore, it’s imperative that transaction costs are kept low to ensure eftpos remains a competitive force within the payments system.”

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