The country’s small business peak body has called on the ACCC to reject the proposed merger between the three domestic payments schemes until the major banks give merchants comprehensive access to least cost routing services.
An announcement on whether the merger will proceed is due by the end of this week and the Council of Small Business Associations of Australia is concerned that Treasurer Josh Frydenberg’s intervention last week in support of least cost routing could give the ACCC sufficient comfort to approve the deal.
The major banks have called on the ACCC to authorise the proposed merger of NPP Australia, Eftpos and BPay, even though they have not volunteered specific undertakings to support the rollout of routing services that would help small merchants lower the cost of accepting contactless debit payments.
Eftpos is the cheapest platform on average for processing contactless debit payments but the major banks – NAB, Westpac, ANZ and CBA – default such transactions to higher cost platforms operated by Visa and Mastercard.
Least cost routing services, which are being rolled out slowly by the banks, give merchants the power to direct contactless payments to Eftpos.
In June the ACCC indicated in a statement of preliminary findings that it had concerns about the merger’s potential to undermine the competitive position of Eftpos.
The regulator highlighted the importance of least cost routing for small businesses and noted it was examining whether the merger had the potential to stymie the provision of least cost routing services.
COSBOA chief executive Alexi Boyd yesterday renewed her organisation’s call for the merger not to proceed until the major banks gave binding undertakings to provide comprehensive least cost routing services for instore, mobile and online debit transactions.
Boyd accused the Australian Banking Association of being “disingenuous” in a submission to the ACCC, which included a claim that the major banks had already made least cost routing for in-person transactions available to 95 per cent of merchants.
“We were shocked by the ABA’s submission and some of the disingenuous assertions they made,” said Boyd.
“Least cost routing has been marketed opaquely by the banks – it’s just not accurate to say that it has been made available in a transparent way.
“If the banks have been offering the service transparently then why haven’t more small businesses been able to take it up the cheapest cost service?”
COSBOA yesterday released a roadmap for rolling out least cost routing services across different payment channels that would result in LCR being mandated for in-person transactions no later than the end of March next year.
Boyd said her organisation also wants the ACCC to secure binding undertakings from each of the major banks for rollouts of LCR for online transactions by September next year and for mobile transactions by the start of 2023.
None of the major banks have responded to Frydenberg’s intervention in the merchant fees debate, even though they will be required to deliver unimpeded access to least cost routing if he follows through on his pledge to mandate its provision.
The statutory deadline for the ACCC to make a decision on the merger application is Friday.