EFTPOS fees

The Australian Financial Review yesterday reported on a Christmas Eve It outage for the Myer department store. The AFR report points to issues related to PC-EFTPOS. This is a bridge commonly used when connecting POS software to a bank.

With many hundreds of newsagents using Tyro it’s worth noting that PC-EFTPOS is a competitor (with banks) to Tyro. Typically newsagents with an integrated Suncorp or St George or similar bank issued terminal will connect through PC-EFTPOS.

Myer competitors not affected by the outage benefited.

While the Commonwealth Bank has been spending up big promoting fast settlement of EFTPOS transactions for retailers, they have done nothing speed up transactions at the counter from what I can see. A colleague waited two minutes last week for a Comm. Bank EFTPOS unit to dial, connect and approve a transaction. Shoppers leave when such delays occur at busy times. I know from my own experience in my own newsagencies in this very busy Christmas period that I can process an EFTPOS transaction on Tyro in seconds. Ne delays for customers, no delays for me. This helps me make more money. The Comm. bank advertising is useless unless they find their throughput bottleneck. Tyro links to newsagency software systems.

Tyro, the EFTPOS partner for many hundreds of newsagents, today issued a press release relating to their submission to the RBA on EFTPOS. It starts with…

Australia’s four major banks and Woolworths and Coles will potentially be the big beneficiaries if a new regulation of the EFTPOS payments system is allowed to proceed, the country’s only independent EFTPOS provider warned today.

Under the proposals, the major banks and retailers will be allowed to negotiate special deals for themselves, while charging small and medium sized retailers higher fees if they wish.

This is because the big four banks and Woolworths and Coles through their ownership in eftpos Payment Australia Limited (ePAL) are being given the freedom to just do that.

Click here to see the press release and read more about the Tyro position on behalf of their small business customers. The Tyro fight is important to newsagents.

Tyro, the EFTPOS service now used by more than 1,000 newsagents, has published guidance on EFTPOS fees in the wake of changes announced by the RBA in relation to EFTPOS fees. The EFTPOS fee issue will need to be watched carefully by newsagents as EFTPOS has been a plaything of the major banks and the supermarket duopoly to their advantage for too long.

A few weeks ago the ANZ Bank whacked retailers, including newsagents, with an increase in EFTPOS fees. Last week they increased small business loan rates as well as home loan rates. Along they way they have continued to charge hefty fees at every opportunity from overdrafts to account fees.

Newsagents who want to reduce the fees they pay to the ANZ could consider switching to Tyro broadband EFTPOS. My own Tower Systems newsagency software and the pos solutions software both link to Tyro. It’s faster than a bank terminal, more accurate, easier to reconcile and often has lower costs.

Chris Ball from Tyro can provide pricing comparisons on 02 8907 1748.

This is what Bernard Zimmermann, Director of POS Solutions published at his company blog today:

After what happened last week where many of my clients got cut off EFTpos. It is a concerning when now EFTpos is between 25% to 100% of a retailers’ income, there were two major outages once with Westpac last Tuesday and almost everyone down on Thursday. This week CBA went down on Monday morning. That is three major outages in less then a week.

I do not think it is fair. Many retailers are paying extra to do their EFTpos with the majors and they should be getting reliable service.

Anyway we got concerned so I decided to ask Tyro about their record.

This is their response.

Dear Bernard,

100% availability and PCI PA-DSS certified

I hope you are doing well. It is absolutely amazing to see the escalating numbers of EFTPOS outages, glitches and failures that major retail banks deliver and the disruptions it causes to businesses and consumers. It is not rocket science, but only requires an investment into innovation and infrastructure to make the payment system resilient.

Bernard goes on to republish the full email from Jost Stollmann, CEO of broadband EFTPOS provider Tyro.

The correspondence Bernard quotes was sent by Tyro to all their software partners.  I confirmed this with Tyro.  I and several colleagues at Tower Systems received the email from Jost.  It was not sent in response to a request from POS Solutions.

I felt it important to share this and set the record straight.

Aldi released a media announcement on Saturday keeping up pressure on the banks over EFTPOS fees. Here is the full announcement:

ALDI calls for proof that banks’ internal costs will increase due to changes to EFTPOS interchange model

ALDI is today calling for Australian banks to prove their net costs are increasing as a result of changes to EFTPOS interchange fees.

Steven Bigg, ALDI Managing Director Finance and Administration says ALDI believes the overall increase in net costs to the banking industry is minimal and is calling for greater transparency of any unjustified cost increase to retailers.

“Any investigation will show the banks will increase their revenue to the tune of tens of millions of dollars each year at the expense of retailers, if all the Major Banks adopt a similar stance to those banks that have already advised their retailers in writing as to the magnitude of the fee increase,” he says.

“We also see the potential for adverse effects on competition due to inconsistencies in how these charges are being applied to retailers, in what is already  acknowledged as one of the most concentrated grocery retail sectors in the world.

“In light of the Federal Court’s judgement that consumers and retailers have been misled, we believe the decision to change the interchange fee structure should be further reviewed in an open and transparent manner, and the changes placed on hold until this review has taken place.”

ALDI has now made a decision NOT to place any surcharge on EFTPOS transactions within its stores.

As I have noted already, it is terrific for small business retailers like newsagents to have Aldi making the running on this issue as they are more likely to get media coverage than us.

For the record, we will not be introducing EFTPOS fees in any of my newsagencies.  We use Tyro broadband Eftpos and appreciate their helpful position on the new fees.  This will help us keep our costs down.

Click here to see a press release issued on Friday last week by Tyro, the broadband EFTPOS processing business loved by newsagents. This press release continues to raise the issue of fairness as embodied by this quote from Jost Stollmann, CEO of Tyro.

“We certainly consider it unfair for Australia’s shops to face the risk of up to 10 cents higher eftpos costs, when Coles and Woolworths continue to be paid 5 cents for each of their eftpos transactions.”

I think it’s unfair too. It looks like the banks are about to rip us off – added and abetted by the Reserve Bank plus Coles and Woolworths.

My question for newsagents is – what have you done to fight about this. I know that some of you have … but not enough. Every newsagent should be incensed about this and lobbying their bank and local politicians. Come October 1 it will be too late.

In the meantime, I’d encourage newsagents to switch from their current bank EFTPOS provider to Tyro – you’re likely to save money. Most newsagency systems interface directly to Tyro.