Four is not a crowd in Tyro's payments world

Australia's largest independent payments provider, Tyro Payments, has suggested that fines be tripled for breaches of Australia's competition law as one step towards preventing the country's four major banks from crushing smaller competitors.

The dominance of four industry players in a highly concentrated market, the required and legitimate regulatory oversight, the network effects of clearing and settlement and the switching complexity created by product bundling add up to use of market power to stifle innovation among small and medium sized businesses, his company argued in its submission to the Federal Government's Competition Policy Review.

"Australia's four major banks with their market dominance, will do what they can to stifle innovation," Tyro CEO Jost Stollmann said.

Further, the Australian credit and debit card acquiring market is dominated by the four major retail banks and the two major retailers. "New market entrants face significant barriers to entry and expansion. Consequently, Australian consumers do not benefit from the outcomes that a competitive market would provide," Tyro argued.

The firm's four recommendations to the Competition Policy Review are, broadly:

1. Impose triple penalties for ACCC breaches
2. Strengthen competition law and have an ACCC Inquiry into anti-competitive structures and behaviours in Australia's A$440 billion annual card payment space
3. Review Australian government procurement policies and procedures to promote competition and innovation through open panel tendering
4. Encourage the regulator to open up access of the payment system to new technology players, while maintaining supervision and a level playing field.

"It is critical that Australia's small-to-medium business people as well as its start-up and fast growth entrepreneurs believe in fairness and accessibility. The scorecard is not good," Stollmann said.