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Small Business Commissioner renews call for a service guarantee for small businesses

The NSW Small Business Commissioner has renewed his calls for the development and implementation of a “service guarantee” as part of the electronic payments system, following the release of the Reserve Bank of Australia’s Review of Retail Payments Regulation.

Commissioner Chris Lamont said such a guarantee, which was not addressed by the RBA’s review, would help small businesses by establishing minimum reliability standards, mitigating the impacts of outages, providing fair compensation for outages and promoting competition among providers.

“Many small businesses were heavily impacted by a payment system outage in January 2021, “Mr Lamont said. “Small businesses need more certainty about what providers must do during and after an outage.”

The RBA said in its review that it expected payment providers to “offer and promote” least-cost routing (LCR) by the end of 2022. LCR allows a merchant to choose the lowest cost network to process a transaction.

However, the Commissioner repeated his call, made in his submission to the RBA review, for stronger targets for the implementation of LCR.


“There should be clear targets to both assess whether policy objectives are being met and encourage further consideration of practicable regulatory interventions,” Mr Lamont said.

“The rapid decline in cash transactions for small business, particularly during the COVID-19 pandemic, highlights the importance of setting a more definitive timeline and if necessary, mandating least-cost routing for all instore card payments.”

The Commissioner has also recommended extending measures such as a Consumer Data Right (CDR), which could help small businesses get a better deal from payment providers.  He said an extended CDR could assist small businesses in comparing the costs and benefits of various service providers more easily.

“We encourage further consideration of our proposals to navigate what is a complex market for many small businesses,” said Chris Lamont.


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