ALNA issued a good and strong response to the RBA position on payments surcharges:
RBA Surcharge Ban Fails Small Business
The Australian Lottery and Newsagents Association (ALNA) has expressed disgust at the Reserve Bank of Australia’s proposed surcharge ban, condemning it as a bureaucratic failure that demonstrates a shocking lack of understanding of how small businesses operate.ALNA CEO Ben Kearney slammed the RBA’s consultation paper on merchant card payment costs, describing the proposed surcharge ban as “adding insult to injury” during an unprecedented cost-of-doing-business crisis. “The RBA’s payment costs paper represents a fundamental failure to understand the realities facing small businesses,” Kearney said.
ALNA prepared a detailed submission HERE to the consultation so far and will continue to advocate strongly through the next phase of the RBA consultation.
ALNA also put out a media release on the proposed ban HERE. In the release ALNA highlighted the brutal mathematics facing our members, where newsagencies and lottery retailers processing an average of 1,000 daily transactions worth just $15.20 are selling fixed-price lottery tickets with regulated pricing and earning just 10-11.3% commission, losing surcharging rights means payment costs will consume around 7% or more of the entire profit margin.
ALNA is particularly disgusted by the RBA’s lack of courage to take on more courageous cost reduction reforms, our impression is that the real culprits are the card schemes whose huge profits are protected by complex regulations, the RBA are protecting the status quo while small businesses paying 300-400% higher card fees than large retailers, may effectively subsidise the low rates negotiated by giants like Coles and Woolworths.
“Small businesses currently bear the lion’s share of processing fees charged by banks, payment service providers and card schemes,” Kearney explained. “The RBA’s proposed interchange reductions are modest improvements that don’t address the core problem of cross-subsidisation.”
The association demands the RBA show real guts by implementing genuine structural reforms including mandatory least cost routing, deeper interchange cuts, and scheme fee caps. Instead of protecting big business interests, the RBA should deliver cost relief to small businesses fighting through the toughest operating environment in decades
ALNA is part of the Independent Payments Forum, which is lobbying on behalf of small business retailers. newsXpress is part of the IPF as well.
The ALNA statement is more emotive than the IPF statement. This is a good move by ALNA.