Peak industry group the National Retail Association (NRA) has backed calls from Federal Treasurer Josh Frydenberg urging the RBA to support small business on debit card fees.
Today the Federal Treasurer joined a chorus of business leaders to press the RBA to mandate ‘least cost routing’ which would spare small businesses from being slugged exorbitant merchant fees by international providers.
NRA CEO Dominique Lamb said that reforming the debit payments system would be crucial to helping retailers navigate the current COVID-climate.
“The NRA has been a strong and consistent advocate on the need to reform debit transaction costs and we commend the Treasurer for his leadership on this issue.
The RBA can no longer ignore the myriad voices from industry and government demanding changes that update the payments system for the modern digital world,” Ms Lamb said.
“In layman’s terms, least cost routing means providing small business access to cheaper domestic debit payments schemes such as eftpos, rather than requiring transactions fees to only go through the far more expensive international providers.
“Mandating least cost routing would provide enormous relief for small retailers at a time when many continue to battle lockdowns and other restrictions.
“COVID has further accelerated the trend away from cash to digital payments. The current payments system has failed to keep pace with changes in consumer behaviour, with the overwhelming majority now either using tap-and-go or mobile methods for transactions.
“With COVID continuing to wreak havoc and cash becoming even less frequent, providing cheaper options for digital transactions is not something that retailers can afford to wait years to occur.
“Retailers across the country strongly urge the RBA to take on board the unequivocal stance made by the Treasurer and enact the necessary reforms to the debit payments system.”