Major banks are facing another backlash from lawmakers in Canberra as business groups call on the Morrison Government to help accelerate the rollout of least-cost routing for Australian merchants.Peter Strong, the chief executive of the Council of Small Business Australia(COSBOA), yesterday panned the banks for delaying the introduction of new routing services for contactless payments, saying it was costing small retailers hundreds of millions a year."We were promised by the banks that they would provide least cost routing," he said."It's costing small businesses a lot of money and it shouldn't be."The people who are making money out of it simply don't want to deliver the cheaper service."No major bank has completed the rollout of least cost routing - which is expected to halve the fees paid by merchants each time a customer makes a contactless payment with a debit card.The yet-to-be-delivered service will enable merchants to direct card payments through the Eftpos system, rather than high-cost platforms operated by Visa and Mastercard.The lethargic response of the banks is stirring disappointment and anger among government members, including the chair of the House of Representatives Economics Committee, Tim Wilson.Last December Wilson's committee called on the banks to offer least cost routing by April this year."The committee stands by its report and expects the banks to fulfil least cost payments in a timely manner," Wilson said."Considering the reputational questions facing banks, it's not unreasonable they take swift action to rebuild confidence with small business and consumers."Wilson's gentle nudge came as the Reserve Bank renewed its criticism of the major banks for their sluggard efforts on least cost routing.Tony Richards, the head of the RBA's payments policy department told the Australian Payments Summit in Sydney that the slow rollout of low cost payments systems reflected a lack of competition in the merchant acquiring market. "A range of stakeholders including in Canberra have also been calling for the industry to provide least cost routing, however the response of the major banks has been disappointingly slow," he said."This appears to be symptomatic of a broader lack of competition in acquiring services."In many respects the card industry seems to be dominated by the issuing side of the market with the incentives sometimes being to push higher-cost over lower-cost payments systems."With small business advocates, such as small business ombudsman Kate Carnell, now stepping up pressure on the government to jawbone the banks into action, it appears the country's most reputation-challenged companies have fashioned another public relations disaster for themselves."The banks are making a nice windfall out of the current arrangements for processing contactless transactions," Carnell said."If the banks want us to believe they are changing, then this is a really good example that shows they haven't changed the way they treat small businesses and consumers."COSBOA's Strong said he believed the time had come for the government and the RBA to force the banks to introduce a more efficient service for contactless payments."It looks like this is another problem that will require government intervention," he said.