An increase in Eftpos fees has sparked outrage from small business owners and ordinary Australians who label the move as ‘extortion’.
Businesses across Australia are required to have an Eftpos terminal in their stores to allow customers to pay by card.
The Eftpos machine is provided by the bank at a monthly service fee, while a separate fee is charged for each transaction.
One store owner claimed that the fee was increased by 20 percent at the beginning of the year, with the cost being picked up by the company or passed on to the customer.
Furious 2GB listener Marissa, identified only by her first name, told radio host Ben Fordham on Monday that she felt “swindled” after paying with her card.
“Over the weekend, every debit transaction has incurred a transaction. Is this the new norm?’ she said.
Furious 2GB listeners told host Ben Fordham (pictured) that the Eftpos fees felt like they were being “swindled for using their own money.” While another listener who is a shop owner compared the machine service charge to ‘extortion’
Small businesses need an Eftpos terminal to offer customers the option to pay by card. The Eftpos machine is provided by their bank for a monthly service fee and incurs a per-transaction fee that is either paid by the company or passed on to the customer
“I feel like I’m being scammed with my own money, it’s not a credit card. My Italian roots tell me to carry and use cash everywhere, but the banks don’t even have cash these days.’
Fordham was inundated with messages from consumers about their cash or card situation.
Listeners pointed out that they are forced to pay by card as some shops do not accept cash.
Others who never carry cash complained that they get into trouble when the Eftpos machine breaks down and can’t pay.
Small business owners also expressed frustration after noticing an increase in trading service and transaction fees.
Darren, who is a shop owner and banker with ANZ, said his trading fee has been increased by 20 cents per transaction from January 2023.
‘She [ANZ] sent me a little email in January, but of course I didn’t notice the spam you get until I finally got a bill,” he said.
‘I jumped on it. They made me negotiate it with 5 cents and acted like they were moving the world for me.”
Darren said ANZ dropped the price after outlining how certain branches were no longer accepting cash.
“It was a bit like extortion to some extent,” Darren told the bank.
Editor-in-chief of Canstar, Australia’s largest financial site, Effie Zahos said she felt for both consumers and small business owners.
Ms. Zahos said Eftpos costs around $0.34, Mastercard costs about $0.47, while Amex is “much more expensive” with a $1.34 surcharge.
She added that the fees themselves had not been increased, but were instead influenced by the cost of living.
“We still see the inflation rate at that 7 percent, so the value of what we buy has gone up,” Ms Zahos said.
‘So guess what? The fee we pay on that card goes up because it’s calculated as a percentage.”
Editor-in-chief of Australia’s largest financial site Canstar, Effie Zahos (pictured) explained that the fees themselves had not been increased, but were instead influenced by the cost of living
Ms. Zahos said that while large companies generally take on the merchant fee, the majority of small businesses will pass the fee on to their customers by increasing the cost of the product.
She urged consumers to swipe or insert their card when paying to avoid being saddled with higher transaction fees associated with using “tap and go.”
“I feel for small businesses because it’s a cost and some small businesses can’t bear it and are forced to basically pass it on to consumers,” Ms Zahos said.
“I have some pain for them too. Understand that (they) may charge you a higher fee than large companies.
“I’d swipe rather than tap and go because tap and go can go through some more expensive networks.”
Ms Zahos added that the measly trading fees add up to a big payoff for Australian banks, with the financial institutions expected to earn $6.3 billion in trading fees by 2023 alone.
Small business owners are pleading with the banks to get rid of card payment transaction fees as the small fees add up in the long run.
It’s the small costs that add up in the long run and consumers and small business owners are urging the banks to get rid of transaction fees for card payments.
Small business owners plead with banks to get rid of transaction fees for card payments (Photo: Tayla Fabbro and her colleague from Melbourne café Coffee Joint on Napier)
“It would be a big help,” Tayla Fabbro of Melbourne’s Coffee Joint cafe on Napier told A Current Affair.
“Companies struggle with housing costs and everything else.
‘At the moment we run on costs, because we don’t want to pass those costs on to our customers. We love all our customers. They are like family.
Australia’s four major banks – ANZ, Commonwealth, Westpac and NAB – made a combined profit of $28.5 billion in 2022.