“Smokescreen for monopoly”: Small business groups criticise banks’ plan to merge eftpos, BPAY and NPP Australia

NPP Australia

The banking sector’s plan to merge eftpos, BPAY and NPP Australia into a single payment system has come under fire by small business groups, which say it will ultimately lead to higher fees for businesses.

In a bid to better compete against international players such as Visa and Mastercard, Australian banks are calling for a unified electronic payments system.

Led by NPP Australia, the banking sector argues that a single system is in the public interest because it would allow for faster payments and new payments functionalities.

What’s the payment scheme merger?

Announced in December last year, the merger would see the banks create a unified payments system to help boost their competitiveness in the debit-payments market.

The merger was proposed by NPP Australia, which is mutually owned by 13 organisations including major Australian banks and the RBA. NPP Australia is responsible for the New Payments Platform that was launched in 2018 to improve the processing times of electronic funds transfers.

The idea was first put forward by RBA governor Philip Lowe as early as December 2019, following a review into Australia’s regulatory framework for electronic payments.

Since then, Treasury established its own review, led by King & Wood Mallesons partner Scott Farrell, who will provide the final report to the government by April this year.

Treasury is examining the regulatory architecture of the national payments system to ensure it is capable of supporting new trends in the sector while benefiting consumers, businesses and the economy.

Why are SME groups against it?

Small business groups, which oppose the merger, say it will erode competition and lead to higher prices for small business merchants accepting card payments.

The Council of Small Business Organisations Australia (COSBOA) described the proposal as “a smokescreen for monopoly”.

“In our opinion, it will push up costs, and also there won’t be as much need for the big companies to innovate and develop better payment systems because they’ll all be merged,” COSBOA chief executive Peter Strong tells SmartCompany.

In its review submission, COSBOA asked Treasury to consider which businesses stand to benefit from the unified payment system.

“This is about protection of profits rather than the development of competition to the benefit of consumers and small businesses,” COSBOA wrote.

COSBOA’s criticisms of the payments scheme were echoed by other small business groups, such as the Australian Chamber of Commerce and Industry (ACCI).

ACCI said its members were “very concerned” about the consolidation of a single payments platform, which is scheduled to take effect by mid-next year.

“There is risk that the new governance structure may provide a strong incentive to shift more payment costs onto merchants,” the ACCI wrote in its submission.

The proposal to merge BPAY, eftpos and NPP Australia is currently under consideration by the Australian Competition and Consumer Commission.


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