Big Four banks under pressure to drop digital debit fees

Australia’s Big Four banks may have paused payment terminal rental fees for businesses shuttered by COVID-19, but a fresh battle has broken out over how regular digital transactions are routinely force-trunked via more expensive rails.

Local stalwart eftpos has revealed it has started pushing banks and regulators to quickly open-up access to billions of dollars a year in card-on-file transactions, so that businesses can get a choice over whether they pay higher or lower fees based on how digital payments are routed.

It’s an incremental manoeuvre, but big battles are sometimes won in small steps.

If successful, the move would allow merchants who accept so called card-on-file payments – most commonly used for recurring transactions like bills, subscriptions and memberships – to pull money from debit card accounts without having to run over Mastercard’s or Visa’s higher cost rails.

It would also rattle what, over time, has become a powerful payments technology hegemony that has arguably held back development and innovation in the local payments technology market, prompting repeated interventions by the Reserve Bank of Australia.

“eftpos and its members have already made systems changes to enable eftpos online digital transactions which could lead to lower costs and enhanced payments competition for the benefit of merchants and consumers,” a submission from eftpos lodged with the Senate’s ongoing Select Committee on Financial Technology and Regulatory Technology last week said.

To read more, please click on the link below…

Source: Big Four banks under pressure to drop digital debit fees – Finance – Strategy – Networking – iTnews