Pressure is mounting on the Reserve Bank to tighten regulatory oversight of the four major banks amid further delays on the roll out of the New Payments Platform and least-cost routing for contactless transactions.Despite a request from the powerful House of Representatives' economics committee last December that the banks make least-cost routing available to Australian merchants by April this year, none of the major banks has yet completed a rollout of the new capability.When implemented, least-cost routing could halve the costs borne by retailers for accepting contactless debit transactions because it will allow them to direct payments through the low-cost Eftpos system, rather than the Visa or MasterCard platforms.The Morrison Government has come under increasing pressure from retail industry groups and a string of backbenchers to get the banks to fast track their rollout programs, which require their electronic point-of-sale devices to be updated with new software.Federal politicians are concerned that the banks are deliberately stalling the introduction of cheaper routing because it will punch holes in their fee revenue streams.Experts have given wide-ranging estimates on how much revenue the banks will lose from least cost routing, with the Australian Retailers' Association arguing that it is likely to be more than A$400 million a year.Independent modelling by payments consultancy McLean Roche estimates the four major banks stand to lose more than $550 million after least-cost routing is introduced.RBA governor and chair of the Payments System Board(PSB) Philip Lowe yesterday warned that the banks faced further regulation if they continue to delay their rollouts.Some acquirers, he said, had already completed the necessary work and were attracting new merchants.The delays are occurring even after the banks gave commitments to PSB earlier in the year that the work would be completed. "Partly on the basis of those commitments, the PSB made a decision not to regulate."Since then, I regret to say there has been slippage by some, who have cited technical problems."It is important that the banks get back on track here."A failure to deliver on commitments or to provide the payment services that the community needs will inevitably lead to calls for further regulation."Lowe also roasted several major banks for their slow efforts to connect retail and business customers to the New Payments Platform.He revealed that he had written to the major banks urging them to meet new timelines for delivering NPP services to customers."Given the slow pace of roll-out by the banks, and the prospect of delays for additional overlay services, I recently wrote to the major banks on behalf of the Payments System Board seeking updated timelines and a commitment that these timelines will be satisfied," he said."It is important that these commitments are met."While the major banks try to preserve their bumper revenue take from the bumper fees levied on merchants, Banking Day understands that a second merchant acquiring institution has begun routing contactless transactions through the cheaper Eftpos system.Industry sources said that global merchant services giant, First Data, had joined national business bank, Tyro, as the only acquirers