Smaller retailers will be placed under more financial pressure from fee changes announced by EFTPOS Payments Australian Limited (EPAL), according to the Australian Retailers Association (ARA).
Announced by EPAL on 8 March the changes entail new interchange fees which will lead to increased merchant rates. The ARA is calling on the major banks to absorb the resulting costs.
ARA executive director Russell Zimmerman said while retailers supported measures to increase competition between payment systems including VISA, MasterCard, EFTPOS and acquirers, this was not the time to raise business costs for small retailers.
“Retailers have been struggling with poor trade for over 18 months and now face more months of frugal consumers tightening their belts. New data out today from Westpac-Melbourne Institute of Consumer Confidence shows consumer confidence has dropped 2.4 per cent due to concerns over the Federal Budget, new taxes and rising petrol prices.”
“Smaller retailers in particular should not be expected to cop increased interchange fees from banks that are posting giant profits, especially because they don’t hold the same bargaining power as larger retailers when negotiating with their banks nor do they have the time and resources to try.”
The ARA also noted the new interchange fee structure paid the retailer 15 cents per ‘cash-out’ transaction but this would only benefit food and grocery type retailers, including the only two retail members of EPA that offer this service to their customers. Smaller non-food related retailers were less likely to offer this service due to the limited number of cash transactions in their stores and would not benefit from the new ‘cash out’ interchange payments.
“Keeping competition healthy between debit payment systems is important but the ARA is calling on banks to give smaller retailers a much needed break and do the right thing in absorbing costs related to the new EFTPOS interchange model,” Zimmerman said.