6
INDUSTRY NEWS
NATIONAL
RBA conducts retail payments regulation review MGA TMA and COSBOA delegates met with RBA Governor Philip Lowe and his team on the 9th July 2021 to discuss a number of matters pertaining to the Retail Payments Review, which is currently underway. MGA also met with Federal Treasury to voice our concerns that Least Cost Routing must be considered to be a default facility to assist small businesses in making a payment route choice to help them save on costs.
MGA TMA has strongly advocated for “Least Cost Routing” (LCR), which allows you, the business owner, to choose between transacting a person’s payment via eftpos or the two global cards – Visa and Mastercard.
As Members have no doubt witnessed
The eftpos route is 40% less in costs.
The RBA undertakes reviews approximately every four years. Each review contains some strategic, longerterm topics and areas relevant to trends currently happening in the industry. As part of this review, the industry trends that the RBA will be looking at include issues such as:
• Emerging growth of the Single
Network Debit Cards and how they could change the economics of previous regulatory steps. With debit card usage now significantly outstripping credit card usage, issuers have been looking for new ways to increase their interchange income. They have been using single network card products to do this.
• The gradual rise in scheme fees
in recent years and its impact on overall merchant fees. As interchange fees have been reducing due to increased transparency, the opaque scheme fees seem to have been increasing, thus negating cost benefits for merchants.
• The rise of Buy Now Pay Later
RBA Meeting 9 July 2021
in their businesses, the “tap and go” payment phenomenon continues to accelerate. Driven by the COVID–19 restrictions, the consumer has quickly converted to contactless payments via their debit cards and digital wallets. These non-cash transactions are costing MGA TMA members a fortune in card payment fees to the banks.
mga.asn.au | September 2021 | Edition 5
LCR will allow businesses to choose LCR, which they cannot do because the banks are reluctant to make this facility available to small businesses. Something must be done to help relieve our members of these exorbitant costs because, unlike other industry sectors, we cannot pass this cost on to our customers.
(BNPL) services and how they should be regulated in the payments market. With increasing media commentary on BNPL and the rising share prices of the providers, any potential regulation would significantly impact the industry.
