PAYDAY NEWS’ Post

Michael Sainsbury reports 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. As new Westpac CEO Anthony Miller takes the reigns at the country’s second largest bank, it has called for significant simplification of scheme fees and cap fee increases, stating there are now 400 categories of scheme fees and some have no clear value or purpose. "Scheme fees should be simplified by reducing the number of fees, and billing items and fee categories should be standardised across the card schemes in Australia. Westpac recommends a cap on scheme fee increases to limit their growth over time. This will manage the level of cost in the system. “Over time, card scheme billing structures have become much more complex, and each international card scheme now charges more than 400 categories of scheme fees. "New categories of scheme fees are periodically added to the card scheme billing structures and PSPs without any ability to opt out. “It’s unclear what purpose or value many of these billing items and new fees provide and they are adding unnecessary cost into Australia’s payments system. There needs to be a clear justification when new fee categories are added.” According to the RBA’s issues paper, $1.8 billion is paid in “net” scheme fees in Australia annually. No gross number has been published by the RBA to include “rebates” that are paid by the schemes back to banks and other scheme “participants”, like Coles and Woolworths by the schemes. More in PAYDAY NEWS #Payments Independent Payments Forum Zeller Square SmartPay Commonwealth Bank ANZ NAB Coles Group Woolworths Supermarkets Ben Pfisterer Brad Kelly Peter Drennan Gabby Taylor