Peak industry group the National Retail Association has backed the move from the Reserve Bank to support small businesses by improving the transparency of electronic payment fees.
Retailers support the mandate of least-cost routing for electronic payments to spare small businesses from being slugged by excessive merchant fees from international payment providers.
National Retail Association Chief Executive Greg Griffith said policymakers must act to help small businesses struggling with the increasing costs of living.
“The NRA has been a strong and consistent advocate on the need to reform electronic transaction costs and we commend the Reserve Bank for taking steps to improve the transparency of payment providers’ fees.
“We can no longer ignore the countless voices in the industry calling for change to bring the sector in line with the modern digital world. The current payment system has not kept pace with changes in consumer behaviour and the significant increase of shoppers now using digital wallets and tap-and-go payments.”
Mr. Griffith said least cost routing would provide small businesses with access to cheaper, domestic electronic payment schemes such as EFTPOS, rather than transaction fee processing defaulted to more expensive international providers such as Visa and Mastercard.
“Mandating least cost routing would provide enormous relief for small retailers at a time when many continue to battle with increasing fees from energy to rent to suppliers. Default least cost routing for all in-store and online electronic payments would eliminate any unnecessary merchant fees that ultimately get passed on to customers.
“We strongly urge policymakers to take into account the stance of the retail community and RBA on this issue and enact the necessary reforms to the electronic payment system.”