Aussies get $7 million back as big bank slashes ‘hidden charges’
Australia’s largest bank has simplified and reduced merchant fees for small businesses struggling to recover from the pandemic in a move that will allow Aussies to save an estimated $7 million.
The Commonwealth Bank has introduced a 1.1 per cent and 1.5 per cent flat rate for all in-store card payments and online transactions respectively, regardless of whether it’s a debit, credit or Amex card.
These rates will automatically apply to CBA small business customers who have turnover of $250,000 or less from October onwards.
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The big four bank will also automate least-cost routing, which is when the merchant chooses the cheapest payment network to process the transaction.
Rather than having the merchant select and manage which network (eftpos, Visa or Mastercard) costs the least, CBA will “centrally route” these transactions to automatically choose the cheapest option for them.
Commonwealth Bank’s James Fowle said the move comes after “overwhelming feedback” from its small business customers.
“They want simple competitive pricing without the hassle. They want the benefit from least cost routing without having to manage the routing themselves,” Fowle said.
Additionally, the bank is waiving three months’ worth of merchant fees for small business hit hardest by COVID-19 lockdowns.
“From next week, we’ll be letting more than 50,000 customers know we are automatically waiving their standard merchant fees for three months from September through to November,” Fowle said.
“This translates into approximately $7 million back into their pockets leading up to Christmas.”
The announcement attracted praise from Australia’s small business advocate group, with Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Bruce Billson congratulating CBA for listening to the feedback.
“This is a terrific early Christmas present,” Billson said.
“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.”
Businesses already struggling to recover from the crippling impacts of the pandemic can’t afford the burden of higher payments, Billson added.
“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.”
The lower fees will automatically apply for eligible CBA small businesses, meaning they don’t need to do anything to get the lower fees.
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