Tuesday, June 25, 2024

High transaction fees hurting retailers and consumers, NRA

The National Retail Association (NRA) is calling for action to cease unnecessarily high debit card transaction fees being passed on to consumers.

In light of the Reserve Bank of Australia (RBA) releasing the Retail Payment data for June, NRA CEO Dominique Lamb says measures to remove unnecessary high fees for small businesses and their consumers through least cost routing needs to be actioned as soon as possible.

“Businesses and consumers are facing many financial challenges currently and it’s imperative we eliminate all unnecessary costs and fee gouging,” she says.

“Without action on this issue, this is another cost increase for struggling businesses that will need to be passed on to consumers.”

According to the RBA statistics, June saw a 19% increase in debit transactions since last year.

“The modern retail environment calls for default least cost routing for all in-store and online debit card transactions to be implemented,” says Ms Lamb.

“Debit cards are increasingly becoming the payment method of choice for consumers, amounting to $74.7 billion worth of transactions in June alone.

“Least cost routing allows retail operators to choose the debit network with the lowest fee, which should be the default option for small businesses unless for some reason a business elects to pay more for additional services.

“Australia needs an updated regulatory system for debit payments that reflects modern retail.”

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