A hike in Eftpos fees has sparked outrage with small business owners and everyday Australians labelling the move as ‘extortion’.
Businesses across Australia are required to have an Eftpos terminal in their stores to offer customers the option to pay by card.
The Eftpos machine is provided by the bank for a monthly service fee while a separate fee is charged for every transaction.
One store owner claimed the fee had increased by 20 per cent at the start of the year with the cost either picked up by the business or passed onto the customer.
Furious 2GB listener Marissa, who was only identified by her first name, told radio host Ben Fordham on Monday she felt ‘ripped off’ after paying with her card.
‘Over the weekend every debit transaction incurred a transaction. Is this the new norm?’ she said.
Furious 2GB listeners told host Ben Fordham (pictured) Eftpos fees felt as though they were being ‘ripped off for using their own money.’ While another listener who is a shop owner likened the machine services fees to ‘extortion’
Small businesses require 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 incur a fee per transaction which is either paid by the business or passed on to the customer
‘I feel like I’m being ripped off using my own money, it’s not a credit card. My Italian roots are telling me to carry and use cash everywhere but the banks don’t even have cash these days.’
Fordham was inundated with messages from consumers detailing their cash or card predicament.
Listeners pointed put they are forced to pay by card as some stores do not accept cash.
Others who never carry cash complained they get into a bind when the Eftpos machine is down and they can’t pay.
Small business owners also vented their frustrations after noticing a hike in merchant service and transaction fees.
Darren, who is a shop owner and banks with ANZ, said his merchant fee increased by 20 cents per transaction from January 2023.
‘They [ANZ] sent me a small email in January but obviously the spam you get through I didn’t notice until I finally got a bill through,’ he said.
‘I jumped on it. They allowed me to negotiate it by 5 cents and acted like they were moving the world for me.’
Darren said ANZ dropped the price after he outlined how certain branches were not accepting cash anymore.
‘Looked a little bit like extortion to a degree,’ Darren told the bank.
Editor at large of Canstar, Australia’s largest financial site, Effie Zahos said she felt for consumers as well as small business owners.
Ms Zahos said Eftpos fees sit around $0.34, Mastercard fees are about $0.47, while Amex is ‘a lot more expensive’ with a $1.34 surcharge.
She added the fees themselves had not increased but instead were influenced by the cost of living.
‘We are seeing inflation number still at that 7 per cent, 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 as it’s calculated as a percentage.’
Editor at large of Canstar, Australia’s largest financial site, Effie Zahos (pictured) explained the fees themselves had not increased but instead were influenced by the cost of living
Ms Zahos said while big businesses generally absorb the merchant fee the majority of small businesses will pass the fee onto their customers by increasing product costs.
She urged consumers to swipe or insert their card when paying to avoid being slugged by higher transaction fees associated with using ‘tap and go’.
‘I feel for small businesses because it is a cost and some of the small businesses can’t carry it on and their forced to basically pass it on to consumers,’ Ms Zahos said.
‘I do feel some pain for them as well. Understand (they) may possibly charge you a higher surcharge than big business.
‘I would swipe rather than tap and go because tap and go can go through some more expensive networks.’
Ms Zahos added the measly merchant fees add up to a big payout for Australian banks, with the financial institutions expected to make $6.3billion in merchant fees alone in 2023.
Small business owners are pleading with the banks to get rid of transaction fees on card payments as the small charge adds up in the long term.
They’re the little fees that add up in the long term and consumers and small business owners are pleading with the banks to get rid of transaction fees on card payments.
Small business owners are pleading with banks to get rid of transaction fees on card payments (pictured, Tayla Fabbro and her colleague from Melbourne cafe Coffee Joint on Napier)
‘It would be a great help,’ Tayla Fabbro from Melbourne cafe Coffee Joint on Napier told A Current Affair.
‘Businesses are struggling with housing costs and everything else.
‘At the moment, we’re fronting on the costs because we don’t want to put them onto our customers. We love all our customers. They’re like family.
Australia’s big four banks – ANZ, Commonwealth, Westpac, and NAB – made a collective profit of $28.5 billion in 2022.