In a move aimed at placating federal politicians and thousands of angry retailers across the country, Westpac will today map out its plans to offer least-cost routing on contactless transactions. As pressure mounts on the major banks to abandon the practice of automatically routing Tap and Go payments to high-cost platforms operated by Visa and Mastercard, Westpac has committed to giving merchants the right to access cheaper networks.Eftpos is now able to process contactless transactions at more than half the cost of global card schemes, but its entry into the market has been impeded by the controversial "default routing" practice of the major banks.While Westpac might allay some of the concerns stewing in Canberra over the issue, the bank will not be delivering a cheaper processing service to its merchants until sometime in 2019.That means Westpac will not be able to help its merchants reduce their fees around 12 months after Tyro Payments, which launched last month.Westpac is also likely to trail ANZ, which has said it will begin a staged rollout to its merchants this year.However, Westpac is an odds-on bet to beat Commonwealth Bank and NAB to market, given the feeble efforts made by these acquirers to communicate to their merchant customers the material benefits of least cost routing.Senior Westpac business banking executive, Jim Tate, said the bank would deliver least-cost routing in 2019 and was in discussions with the RBA on its plans. "Australia has one of the highest adoption rates of contactless payments in the world and now that another card scheme is capable of processing these transactions, we are investing in our payments infrastructure to pass this option onto our merchant customers," he said."However, more importantly, we are helping to level the playing field for small businesses by continuing to offer simplified merchant pricing that is based on turnover, rather than technology or card schemes."Westpac's move drew praise from the Australian Retailers' Association, the industry body that has led the push for banks to abandon default routing to the Visa and Mastercard systems."This is a positive move for retailers as merchants shouldn't be disadvantaged for accepting card payments from customers," said ARA chief executive, Russell Zimmerman."McLean Roche Consulting estimates that the current system for routing dual network card transactions is costing our economy in excess of $558 million in additional costs."Westpac's decision comes as retailers turn up the heat on the major banks to accelerate the rollout of least-cost routing, claiming that merchants have been forced to wear unacceptably high fees for too long under existing arrangements.In separate submissions to the Productivity Commission's inquiry into financial services competition, the Australian Lottery and Newsagents Association and the Australian Retailers' Association highlight least-cost routing as their top priority for reform of the payments market."The rapidly growing cost of merchant payment acceptance is now one of the biggest issues ALNA members complain to us about when contacting the association," the industry group stated in its submission."ALNA has for a number of years raised concerns in regard to the