The ARA pushes for payments pain reduction

THE Australian Retailers Association (ARA) has released its submission to the Productivity Commission (PC) Inquiry into Competition in the Financial System Draft Report. The ARA isadvocating for payments reform to promote a more competitive, lower cost payments system to assist innovation across the industry.

Russell Zimmerman, Executive Director of the ARA, said low-cost routing for tap-and-go payments, online card fraud and better regulation were all key issues for retailers already struggling with high costs affecting the viability of the sector.

The ARA’s submission highlighted the need for low-cost routing for tap-and-go transactions, which represent more than two-thirds of card payments in Australia.

 

“The findings of the PC’s draft report show that retail merchants are struggling to manage the high costs associated with Australia’s current payments system,” Mr Zimmerman said.

 

“As customers expect retailers to adopt innovative, seamless and efficient payment options, retailers are left with little choice but to bear the cost burden.”

 

While the ARA believes online card fraud is also a key issue for retailers trying to compete in the e-commerce space, the costs of fraud mitigation technology are often too high for retailers to adopt.

 

“Retailers are facing considerable losses from online fraud, which has grown significantly with the rise of e-commerce, and with other countries cracking down on cyber criminals, Australia will become a bigger target,” Mr Zimmerman said.

 

“We are calling for an industry-backed, mandatory solution which will provide consistency, lower costs for retailers and most importantly, reduce online card fraud for Australian retailers.”

Although the PC recommended removing interchange fees, the ARA are concerned that these costs to merchants will merely be shifted elsewhere.

 

“We are not advocating for the total removal of interchange fees, instead we believe better interchange regulation is needed to limit the high costs of accepting international card payments from schemes like American Express and China UnionPay,” Mr Zimmerman said.

 

“Eftpos, Mastercard and Visa transactions are subject to interchange regulation and it's past time for the international schemes to be regulated as well.”

 

The PC is set to report its findings in July. To read the ARA’s full submission to the PC, click here.

 

About the Australian Retailers Association:

Founded in 1903, the Australian Retailers Association (ARA) is Australia’s largest retail association, representing the country’s $310 billion sector, which employs more than 1.2 million people. As Australia’s leading retail peak body industry, the ARA is a strong pro-active advocate for Australian retail and works to ensure retail success by informing, protecting, advocating, educating and saving money for its 7,500 independent and national retail members throughout Australia. For more information, visit www.retail.org.au or call 1300 368 041.

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