ANZ has launched a marketing campaign aimed at its business customer base to highlight the potential benefits of adopting merchant choice routing to manage contactless debit card transactions.
The bank’s head of merchant acquiring John Collins said ANZ had modified the software running most of its terminal fleet to enable merchants to direct payments to their preferred payments processor.
“We now have ninety per cent of merchant customers able to access merchant choice routing,” he said.
“About ten to fifteen per cent have availed themselves of it.
“We are in the process of communicating with customers about the benefits of MCR.
“It’s something we wanted to do that last year but we ran into problems with our terminal provider.”
Most of Australia’s major banks now offer some retailers and other merchants the ability to direct contactless debit transactions to Eftpos Australia, rather than have them automatically routed to global payments schemes, Mastercard and Visa.
The banks have come under pressure from the Reserve Bank and the federal government to speed up their rollouts of the service because of the lower average costs many small businesses are likely to incur by routing transactions to the Eftpos network.
However, Commonwealth Bank and National Australia Bank have been particularly slow bringing the service to market.
ANZ is the second major bank to ramp up promotion of merchant choice routing after Westpac announced last August that it would automatically switch on the service for 37,000 small businesses that it believed would harvest cost savings.
While Westpac confirmed last week that it had completed the rollout, a spokesperson refused to confirm that at least 37,000 merchants were now using the service.
“To help our merchant customers save money, Westpac led the industry by proactively contacting businesses we believed would benefit from activating Merchant Choice Routing (MCR), or least cost routing, based on their current usage,” a Westpac spokesperson said.
“We have now activated MCR for all customers who we believe will benefit and have opted to stay in the activation program.”
Collins said ANZ had decided it would not automatically activate merchant choice routing for customers it believed would benefit from the capability.
“However, we’ve changed the way merchants are onboarded,” he said.
“We force that conversation between the banker and the customer on what the cheapest services will be for them.”
ANZ is preparing to outsource its merchant acquiring business to a joint venture company to be established later in the year with global payments services giant, Worldline.
While ANZ will hold a 49 per cent stake in the joint venture, Collins said that the bank “from a legal point of view” was effectively outsourcing merchant acquiring services to a third party.
ANZ and Worldline are developing a brand for the new business, which would likely retain an association with the bank.