By Aimee Chanthadavong
Eftpos Payments Australia Limited (EPAL) has announced a new multilateral interchange fee model for eftpos transactions, part of a package of measures to strengthen the competitiveness of the popular system.
The new fee model will support investment in enhancements to the eftpos network which will make it more secure, convenient and accessible for both retailers and consumers.
There is no charge by EPAL to consumers in the new eftpos interchange fee model.
The multi-lateral fee model is intended to replace the previous system of bilateral interchange fee arrangements struck between different participants in the eftpos payment network.
EPAL managing director, Bruce Mansfield said the company had determined a simple range of multi-lateral interchange fees: zero for charities, Medicare Easyclaim and low-value transactions below $15, and 5 cents for point-of-sale (POS) transactions of $15 or more.
“The new 5 cent interchange fee for standard POS transactions is less than half the equivalent fee of 12 cents payable for international scheme debit cards (Visa and
MasterCard), which is at the top of the RBA-regulated range,” he said.
“Our new multi-lateral interchange fees should be considered alongside the separate scheme fees that apply to both EFTPOS and international scheme debit cards. 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.
“The new multi-lateral model gives EPAL and its members the confidence and funding necessary to invest in EFTPOS enhancements such as chip technology for state-of-the-art security, contactless payments that are quick and convenient, mobile and online payments.”
Multi-lateral interchange fees determined under the new model represent payments from the acquirer to the issuer, except for transactions involving cash out, which trigger a payment from issuer to acquirer. Under the new EFTPOS model, the ‘reverse’ interchange fee for transactions involving cash out is determined at ‘negative’ 15 cents.
Mansfield said the new zero interchange fee for low-value transactions also provided an incentive for more retailers to accept small payments on EFTPOS.
However, Tyro CEO Jost Stollmann said the changes do nothing to help the Australian debit payment system except make it more expensive and reduce the cost advantages versus the more expensive global networks.
“We will continue to push for every day and earlier settlement into merchants’ accounts. And every time a major bank lets its merchants down with an EFTPOS failure, we will make the case for overdue innovation and investment into the Australian payment space,” he said.
The new multi-lateral interchange fee model will be effective from 1 October 2011.
“It comes down to the important decision that eftpos remains viable. We need to invest in it so it can be the viable, cheapest and safest payment product against international schemes,” Mansfield said.
“I think we’re trying to be fair. And because of the structure of the interchange fees, merchants can look at their mix and minimise their cost while maximising eftpos transactions.”