New research reveals that Australian consumers are overwhelmingly in favour of small businesses being given the ability to choose the cheapest option to process debit card payments through Least Cost Routing (LCR).
The survey found that 83 per cent of respondents think it’s important for merchants to be able to select the lowest cost network, with 45 per cent of consumers stating that merchants were likely to pass on any fee savings to their customers.
The result comes in the midst of growing public awareness and concern over business costs in the COVID-19 environment. An ongoing petition that called on public support for Least Cost Routing has been signed by over 15,000 people at the time of writing.
With LCR, merchants get to decide what payment debit card transactions will apply to based on the lowest cost. It has been noted that debit card transactions now amount to around $9 billion and account for almost 70 per cent of total electronic retail transactions annually, overtaking cash as the default mode of payment in Australia.
“The new research shows that Australians clearly recognise and identify with the pressures small businesses face and the importance of keeping their costs down,” eftpos CEO Stephen Benton said.
Benton also noted that when asked about which payments network Australians would prefer to process their online or tap debit card transactions, 66 per cent of consumers have no preference in network or would prefer to use the low-cost Australian eftpos network, rather than international schemes. And 91 per cent of respondents stated that they believe merchants processing via the eftpos network would not have a negative impact on their payment experience online or in-store.
The petition is supported by a leading group of influential industry organisations including the Australasian Convenience and Petroleum Marketers Association (ACAPMA); Australian Association of Convenience Stores (AACS); Australian Chamber of Commerce and Industry (ACCI); Australian Lottery and Newsagents Association (ALNA); Council of Small Business Organisations Australia (COSBOA); Franchise Council of Australia (FCA); Institute of Certified Bookkeepers (ICB); MGA Independent Retailers / Timber Merchants Association (TMA); National Retail Association (NRA); and the Restaurant & Catering Industry Association of Australia (R&CA).
Treasurer Josh Frydenberg also voiced support for LCR as a key competitive mechanism to help level the playing field between small businesses and their larger peers with more market power,
COSBOA CEO Alexi Boyd said that she was pleased to see increasing public backing of the need for small businesses to keep their costs down.
“People know that small businesses are under intense pressure right now, and Australians clearly have a preference for merchants to choose their own destiny when it comes to debit card fees – whether it’s in stores, on mobile or online,” Boyd said.