News about Least-cost routing and its adoption in the Australian payments space
A quiet achiever in Australian payments industry, IPSI, has certified its products and services to carry the “Australian Made” logo, sending a strong message to the market about its local focus.
LCR
The RBA latest 6-monthly data on Least Cost Routing (LCR) highlights not only how far there is to go to full enablement, but the reasons why Australia’s acquirers aren't there yet.
Merchant Service Fees
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Least Cost Routing (LCR) came to the rescue on Sunday, as Mastercard users were unable to make online, in-person or ATM transactions on the US network.
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After more than five years of lobbying from Australian small business to reduce the cost of mobile transactions, eftpos functionality and least cost routing (LCR) is finally available for some Google Wallet mobile debit transactions in Australia.
The cost of card fees levied on businesses is at record levels, forcing higher surcharges for consumers in a cost of living crisis, according to the Independent Payments Forum (IPF).
Fintech
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Interchange fees have long been the focal point for regulators seeking to control merchant payment costs. However, mounting evidence suggests that regulating these fees alone has been insufficient to curb overall payment expenses that are now estimated at $6.4 billion each year in Australia.
Regulation
Westpac has taken aim at the “complex” fees charged by card schemes like Visa and Mastercard, as well as controversial “blended” pricing plans imposed on many small businesses, in a comprehensive response to the Reserve Bank of Australia’s inquiry into merchant fees and surcharging.
The urgent need to reduce card fees for Australian small business was a strong theme in early submissions to the Reserve Bank of Australia’s inquiry into card fees and surcharging this week.
The Australian Small Business and Family Business Ombudsman, Bruce Billson, has called for Least Cost Routing (LCR) of debit card payments to be mandated by the Reserve Bank of Australia, comparing the current system to expensive and unnecessary toll roads.
“Given the RBA’s present priority on curbing retail inflation, an emerging question is whether Governor Michele Bullock will be looking to recast the battle over merchant fees as a macroeconomic concern.”
