We have been working closely and personally with Tyro CEO Jost Stollmann on the challenge of increased interchange fees which will come into effect in a few months.
The potential impact of these higher fees on small business retailers is considerable as they make all retailers except Coles and Woolworths ten cents per EFTPOS transaction worse off.
In our work on behalf of our retail community we have lobbied politicians (including government ministers), in writing and in person, and brought to public attention the issues. We will continue with this project, to seek a fair EFTPOS regime not only for our customers but for small business retailers more widely.
While not directly the responsibility of a software company, we are well positioned to engage because we see the volume of EFTPOS traffic and the potential impact of a fee rise on small business retailers.
We feel passionately about the treatment of small business retailers and they way they are treated sometimes by government, regulators and those in authority, such as the board which made the decision to increase EFTPOS fees and banks.
In 2010, banks increased their fees on business by 13% to $6.9 billion. In 2011, banks decided to increase the interchange fee for EFTPOS transactions by 10 cents, except for Coles and Woolworths. Now, small and medium business customers of the big banks are the least satisfied of all business customers.
Why has EFTPOS Payments Australia Limited (EPAL), which represents the banks and big retailers and processes 2 billion transactions per year, announced an increase of the interchange fee? Why raise the cost of EFTPOS transactions by 10 cents for all acquirers and merchants except Woolworths and Coles?
In August 2009, the Reserve bank of Australia refrained from regulatory removal, judging that the banking industry had not yet reached the point where they exerted significant competitive pressure on interchange fees. What is the conclusion now?
Unless they ‘BREAK UP’ – genuinely and not like the NAB and their recent faux break up, banks will lose the chance to act responsibly. A strong EFTPOS system requires investment by acquirers and merchants. It does not need banks to stop paying and start charging by levying a new tax on EFTPOS access. This is an unjust and untimely burden on Australia’s merchants and consumers!
Tyro is a friend to small business … delivering quality broadband based EFTPOS integrated with our Point of Sale software. We support their campaign and share their commitment to small business retailers in Australia.