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RBA to make crucial decisions on retailer acceptance costs on credit cards
THE Australian Retailers Association (ARA) is looking forward to the Reserve Bank of Australia (RBA) Payments Systems Board making a final decision on Friday 20th May to accept a number of recommendations on payments system reform.
Australian retailers are looking to regulation to deliver efficiency, fairness and resolve the apparent market failure. The ARA is optimistic that that the RBA is looking to reign for those selected few high cost cards which would otherwise continue to cost merchants more.
ARA Executive Director, Russell Zimmerman, said this is will be a positive sign of action from the RBA’s Payments System Board (PSB) that should deliver balance to our payments system, providing safe and affordable credit for shoppers and reasonable cost of acceptance for Australian retailers.
“The ARA has been working with the RBA seeking to have merchant fees reduced and aiming to have companion cards regulated. We are hopeful that we will see the RBA accept previous recommendations when they meet this Friday,” he said.
“Retailers have been in an ideal position to comment on how this can be achieved with the ARA intimately involved in the process to reduce costs for our sector,” Mr Zimmerman said.
The ARA considers the expected outcome a step in the right direction, through there are flaws that remain in the current system which are unlikely to be addressed on Friday. The largest of these issues is the lack of regulation of the plethora of very high cost and new payment systems coming on to the market.
Unregulated payment systems - including American Express, Diners’ Club, China Union Pay – carry greater costs to merchants than the regulated Visa and MasterCard. These excessive fees are forcing many retailers pass these higher costs onto their customers by surcharging.
“It is heartening that - at least in this case - the RBA is looking to reign for those selected few high cost cards which would otherwise continue to cost merchants more.
“Through the efforts of the ARA over many years we have been able to reduce costs on the three regulated payment schemes, EFTPOS, Visa and MasterCard,” Mr Zimmerman said.
The ARA is advocating for the regulation of all card schemes to reduce costs on all cards. Retailers are encouraged to support this position by refusing to accept high cost cards and surcharging, and discouraging acceptance of the high cost payment schemes.
Since 1903, the Australian Retailers Association (ARA) has been the peak industry body representing Australia’s $300 billion retail sector, which employs over 1.2 million people. The ARA ensures retail success by informing, protecting, advocating, educating and saving money for its 5,000 independent and national retail members throughout Australia. Visit www.retail.org.au or call 1300 368 041.
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