Industry groups say small businesses should be wary of passing on new Eftpos interchange fees to customers, urging retailers to disclose the new charges upfront to avoid confusion.
Eftpos transactions are those that involve consumers paying for goods and services with their debit cards.
The Eftpos system is run by ePAL, which is owned by major entities including banks and supermarket chains Coles and Woolworths.
Under the old Eftpos structure, the consumer’s bank paid an interchange fee to the retailer’s bank for processing the payment.
The fee, which is fixed at four to five cents per transaction, is set by the Reserve Bank of Australia.
But on Saturday, October 1 the process was reversed, with the retailer’s bank paying a five-cent interchange fee to the consumer’s bank for each Eftpos transaction over $15.
Transactions relating to charities and Medicare Easyclaim are exempt from the new system, as are payments made at Coles and Woolworths.
It’s been suggested the banks will pass the fee on to retailers, who may then be forced to pass it on to customers.
In a bid to boost its market share in the small business sector, the Commonwealth Bank has pledged not to increase fees for Eftpos transactions.
“Many businesses are doing it tough, which is why we have chosen not to pass on these additional costs to our customers,” a Commonwealth spokesperson said in a statement.
Small business lobbyist Peter Strong believes all banks should show their support for small business by withholding any passing on of Eftpos fees for at least 12 months.
Strong says the change in fee structure could cause confusion and contribute to retailers’ woes.
“Some [small businesses] will stick up a sign saying that if you use Eftpos or credit card, it will cost you an extra 1% or whatever, and some will throw [the extra cost] onto the price of their products,” he says.
Ingrid Just, a spokesperson for consumer group Choice, says retailers that pass on the charge should only add a minimal amount to customer bills, noting it is a flat fee and not a percentage surcharge.
“There is not a fee for items under $15 but for payments over $15 there will be a small fee [for retailers’ banks] and there is talk that some retailers may pass that on to shoppers,” Just says.
“Whether it is disclosed in a surcharge, or one that is added to the cost of goods overall, remains to be seen.”
Just believes consumers are becoming more aware of surcharges imposed by retailers and whether they actually reflect costs faced.
“We encourage retailers to disclose that upfront before people decide what payment method they’re going to use,” she says.
Last month, the Federal Court ruled that ePAL had made misleading statements about the impact of the proposed fee changes on consumers.
ePAL was ordered to publish corrective advertisements after CEO Bruce Mansfield said in August that consumers would not face new charges following the changes to interchange fees.
The new advertisements are to state that ePAL is aware that some merchants’ banks are intending to pass part or all of the fee changes on to some retailers, while some are not.