The Commonwealth Bank (CBA) has announced that it will automatically lower costs incurred by small businesses and family enterprises with a turnover of less than $250,000. This move comes on the back of mounting calls for financial institutions to adopt least-cost routing, thereby cutting the high and hidden costs associated with electronic card payments for small operators and family enterprises.
The announcement has been welcomed by the Australian Small Business and Family Enterprise Ombudsman, Bruce Billson.
“I congratulate the Commonwealth Bank for hearing the feedback from the small business community and taking this first step which will help a section of the small business community,” Billson said. “There is a lot more to be done though, and I urge all banks and financial institutions to address this critical issue.
“The use of cashless transactions, particularly tap-and-go payments, has dramatically increased due to COVID-19 and it is vital to ensure that all small businesses are being offered the lowest cost options from their service provider or financial institution.” Billsdon added.
CBA has also said that it will waive three months of merchant fees for the benefit of small businesses hardest hit by COVID-19 lockdowns, a move Billson described as a “terrific early Christmas present” for the many small businesses and family enterprises already operating on tight margins and battling the disruption to their businesses caused by COVID-19 who can’t afford the added burden of paying higher than necessary fees for their financial transactions.
“The cost of these higher and hidden charges across the economy is many millions of dollars – money that could be better put to work to grow business and employment prospects,” Billson averred.