Pressure is mounting on the Reserve Bank of Australia (RBA) to force the big banks to be banned from hitting small businesses with grossly expensive merchant card payment costs, rather going after already struggling small businesses who are forced to recover merchant fees they are forced to wear imposed by the banks or payment service providers.
Australian Association of Convenience Stores (AACS) CEO Theo Foukkare said the RBA’s plan to ban surcharging on both debit & credit transactions would ultimately cost Aussie consumers more money every time they shop at a small business.
“The RBA has entirely missed the mark here and they’re happy to just sit back and have small businesses absorb the cost of digital transactions on their bottom line, rather than going after the big banks that are allowed to legally run this rip off,” Mr Foukkare said.
The RBA are taking the easy road & not taking the opportunity to implement real reform in the payments sector”.
“Banning surcharging without significant reform to the current scheme fees being charged by the major banks, Eftpos, Visa and Mastercard, will simply drive up consumer prices, as businesses can’t afford to not pass them on.
“Our members don’t profit from these surcharges – they’re set by the banks.
It’s a cash cow for greedy financial institutions that the government allows to burden small businesses with this issue.
Small retailers are simply stuck in the middle. “The only winners as a result of the RBA’s proposed policy are the big banks and big businesses.
“The RBA has ignored our calls to address the massive merchant fees with the banks that set them and to pull them into line. “Even more frustrating is the fact the RBA has continuously ignored our desperate calls to mandate ‘dynamic least cost routing’ to ensure merchant fees were as close to zero as possible”.
“Even after these latest proposed changes by the RBA, small businesses will be paying 600 per cent more in fees than big companies like Coles and Woolworths.
For every $100 transaction, Coles & Woolworths will only pay a few cents however that same transaction will cost a small business anywhere between $1.00 – $1.50.
“Another major miss by the RBA is not stepping in to regulate the tactic of ‘blended rates’ being offered by banks – where they merge debit and credit card fees into a single fee that often is slightly cheaper but is still way too high.
This is just another way for the banks to take advantage of small businesses, their customers and everyday Aussies.
“If small businesses are truly the backbone of the economy, the RBA is about to cripple it.
“The only part of the proposal that the AACS welcomes is the transparency that providers will need to undertake with their pricing,”
Mr Foukkare said.
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