13,200 signatures and growing - that’s the number of Australians who have joined small businesses to call on the Reserve Bank of Australia to act on crippling debit card transaction fees for both businesses and consumers.
A petition established by the Council of Small Business Organisations Australia (COSBOA) and nine other leading small business organisations says inaction by the Reserve Bank of Australia will continue to impose high costs on small local businesses that are already struggling due to COVID restrictions.
Businesses often pay higher fees than they should for accepting debit card purchases because the lowest cost payment route (usually eftpos) is not the default. These higher fees ultimately hurt all Australians, with small and family businesses and poor and disadvantaged consumers impacted the most.
The Save your Local Business from Crippling Card Fees petition is asking that:
• Businesses be able to access the lowest cost payment option through a Multi Network Debit Card system that should be made mandatory for all banks, no matter their size.
• The lowest cost payment route be the default for all debit transactions, whether consumers tap their card, wave their device, or pay online.
COSBOA CEO Alexi Boyd said small businesses already pay significant transaction fees on the eight billion debit transactions made each year, and the RBA’s proposed changes would result in further costs.
“With the impact of COVID already causing financial pressures to businesses, the last thing we need is to add greater stress to them,” Ms Boyd said.
“The payments landscape is a complex one for most small businesses and this, combined with a lack of transparency in fee structures, has created an environment of higher than necessary costs which ultimately impact small business owners and in turn, their customers.
“We are calling on the RBA to make a fair and equitable environment for businesses in terms of payments and merchant fees.”
Ms Boyd said the RBA also needs to work with the banks to eradicate the confusing pricing methods introduced by the big banks over recent years. They are designed to make switching to the least cost network appear less attractive to small business owners.
“We have evidence where small businesses have asked about LCR and their banks have come back with a new service proposal where transaction fees were increased by 275% compared to existing pricing, and the previously free terminal rental had a surprising new monthly fee, potentially putting the business in a worse position overall,” she said.
“The continued lack of transparency and complicated ‘switching processes’ where the small business must rely on advice from the bank that has an interest in keeping merchant fee costs high, has resulted in stifled competition and an inability to adopt LCR.
“This cannot keep going on like this, and we urge the RBA and Federal Government to make low-cost payments the default for local and small business, so we ensure the future of Australia’s local payment network, eftpos, as a choice on all debit cards.”
The other leading small business organisations include National Retail Association (NRA), Australian Association of Convenience Stores (AACS), Australasian Convenience and Petroleum Marketers Association (ACAPMA), Australian Association of Commerce and Industry (ACCI), Australian Lottery and Newsagents Association (ALNA), Franchise Council of Australia (FCA), The Institute of Certified Book keepers (ICB), MGA Independent Retailers, Restaurant & Catering Industry Association of Australia (R&CA).
Download campaign materials and learn more here.