Thursday, July 25, 2024

ARA pushes for streamlining payment options

The Australian Retailers Association has released its submission to the draft report of the Productivity Commission (PC) inquiry into competition in the financial system, advocating for payment reform to promote a more competitive, lower-cost payments system.

ARA Executive Director Russell Zimmerman says key issues for retailers already struggling with high costs are low-cost routing for pay-and-go payments, online card fraud and better regulation.

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

“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.”

Mr Zimmerman added that while online card fraud is a key issue for retailers, the costs of fraud-mitigation technology are often too high for them 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.

“We’re 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.”

While the PC recommended removing interchange fees, Mr Zimmerman expressed concerns that these costs to merchants would be shifted elsewhere, advocating instead for better interchange regulation to limit the high cost of accepting international card payments from schemes such as American Express and China UnionPay.

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

The PC is set to report its findings in July.

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