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Treasurer finally giving small business a fair go on debit card fees

COSBOA welcomes today’s news that the Treasurer has written to the RBA’s Payment System Board to strongly encourage it to mandate both least cost routing as the default, and multi-network debit cards.

Debit card payments are processed through one of multiple networks. The domestic network, eftpos, charges lower merchant fees to small businesses, but contactless payments like mobile payments typically go through the more expensive Visa or Mastercard networks. Currently small business owners have to unpack their fees, an often onerous task, then ask their bank to switch to make the lowest cost network– a flawed system, considering most small business owners have no idea that the option even exists.

COSBOA CEO Alexi Boyd said “Our years of advocacy have finally paid off. Unnecessarily high debit card fees add up and are a major drain on the economy, especially as consumers increasingly turn to digital payments during COVID-19. Addressing this issue is crucial for small businesses as they rebuild from lockdowns.”

“Merchant fees is such a complex topic involving obscure technical terms and concepts, powerful multinationals, and multiple regulators. The average small business person can’t be expected to understand it, and it’s easy for the major players to create smoke and mirrors to ensure they aren’t even aware the impact it’s having on their business .”

“it might be a complex system but the solution to the complexity of the system is clear: The easiest, simplest solution for all involved is to recognize the impact on small businesses and make the foundation of all decisions to mandate least cost routing as the default. That way, now and into the future whether a consumer taps their debit card, waves their smart phone, or enters their card details online, the small business owner can be assured they will be charged the lowest fee and get on with running their business. Neither small business owners nor consumers should have to burden themselves with trying to understand this complicated topic.”


“Thank you Treasurer Frydenberg for listening to our concerns and committing to better regulation.”

Ms Boyd added “This has been a long fight, from when small business owners first started noticing their merchant fees go up with the introduction of tap-and-go almost ten years ago, to this year’s grassroots campaign and countless meetings at Parliament House.”

“Today’s outcome wouldn’t have been possible without the hard work of COSBOA members like MGA Independent Retailers, the Australian Lottery and Newsagents Association, the Australasian Convenience and Petroleum Marketers Association, and Restaurant and Catering, as well as our previous Small Business Ombudsman, Kate Carnell, and present Ombudsman, Bruce Billson. Thank you.”



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