The Australian Newsagents Federation is calling on EFTPOS Payments Australia to reconsider its plan to increase EFTPOS interchange fees, arguing small business will bear the brunt of the new fee structure.
Earlier this month, EFTPOS Payments Australia, or EPAL, announced a new fee model will come into effect on October 1.
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Under the new model, merchants will incur a five-cent fee for every EFTPOS transaction over $15, while transactions under $15 will incur no fee.
This compares to the current 12-cent fee for transactions made on the Visa and MasterCard networks through debit cards.
EPAL managing director Bruce Mansfield says the new interchange fee represents a discount when compared to the 12 cents charged for debit cards, which is at the top of the RBA-regulated range for fees.
“Our new multilateral interchange fees should be considered alongside the separate scheme fees that apply to both EFTPOS and international scheme debit cards,” Mansfield says.
“When the significantly cheaper EFTPOS scheme fee is factored in, EFTPOS transaction charges will be three to four times cheaper for retailers than international debit card transactions.”
But ANF chief executive officer Alf Maccioni has described the new model as an “EFTPOS tax”, arguing the fees will cost consumers and small businesses in excess of $150 million annually.
Maccioni says EPAL’s shareholders include the major banks and retail giants Coles and Woolworths, who manage their own terminals.
Through a transitional arrangement, Maccioni says Coles and Woolworths can opt out of the new charges while the banks will receive an increase in their EFTPOS fees to add to their “already very healthy” profits.
“This completely removes the previous level playing field for Australia’s thousands of small businesses, including our community newsagents,” he says.
“Coles and Woolworths will continue to receive a rebate and get a further leg up to increase their market advantage over struggling small businesses, many of whom are still recovering from recent natural disasters.”
However, Mansfield says that given 20% of EFTPOS transactions are below $20, the new fee structure means businesses won’t be penalised for continuing to offer EPAL services.
He also points out that the reverse interchange fee is still at -15 cents, meaning merchants still have an incentive to provide cashout.
While Maccioni concedes that payments under $15 will incur no fee under the new regime, he states: “People do not realise that even this is actually an increase of four to five cents on the previous rebate received, and the major retailers will still benefit from the previous model.”
“Newsagents will be disproportionately affected by these changes due to our small overall basket sizes and numbers of transactions,” he says.
Maccioni says the Government and the banks need to have “a good look” at the proposal before it comes into effect.
Jost Stollman, chief executive of EPAL rival Tyro, has also criticised the fee structure for being “worlds apart” from the current model, arguing SMEs will be forced to cough up extra cash for EFTPOS transactions.