Retailers want more from banks on new Eftpos offer
Australia's peak retail group is warning the major banks to give all retailers equal access to the Eftpos processing of contactless debit transactions after ANZ acknowledged that thousands of its merchant terminals were not yet programmed to deliver the service. ANZ last week became the first major bank to allow some merchants to choose whether contactless debit payments are processed through the international schemes (Visa and Mastercard) or the comparatively low-cost Eftpos platform.However, not all ANZ merchants currently have access to the Eftpos service, with the bank disclosing on its website that payments facilities located at medical practices and multi-merchant terminals were not offering "merchant choice routing".ANZ manages a diversified fleet of merchant terminals, but only five models are currently offering Eftpos processing of contactless payments.In a revised merchant services contract published on its website, ANZ warns its business clients that access to the Eftpos service "may not be immediate" and could trigger additional set-up costs."The merchant acknowledges that ANZ may instruct the merchant to take additional steps to ensure activation is effective," the bank tells business customers in the newly worded contract."For example, the merchant may need to upgrade, restart or reconnect their electronic terminals for merchant choice routing to become effective."The Australian Retailers' Association (ARA), which has been agitating for the rights of merchants to decide how contactless debit transactions are processed for many years, says it is disappointed with ANZ's decision not to offer a pure "least cost routing service".Under the business model recommended by the Reserve Bank's Payments System Board, it was envisaged that ANZ would have offered a service that automatically directed contactless payments to the cheapest processing platform.Instead, the bank's upgraded terminals are only capable of diverting all of a merchants' contactless transactions to either Eftpos or the international card schemes.And the "opt-in" nature of the service offering means that cost savings will only be harvested by those merchants that request to use Eftpos."Although the ANZ bank has stated that it is committed to working towards "least cost routing" it is difficult to understand why ANZ was unable to achieve this when Tyro, a small acquirer, was able to accomplish this in about three months," ARA chief Russell Zimmerman said."Furthermore, the ARA is perplexed as to why the National Australia Bank (NAB) and Commonwealth Bank of Australia (CBA) banks are still silent on this issue."While we understand that both banks will be working towards an offering, we would encourage both banks to offer least cost routing and not an opt-in model as a matter of urgency."Westpac confirmed to Banking Day that it would launch Eftpos processing of contactless payments from this morning.While details of Westpac's service offering have not yet been made public, the bank's revised merchant contract indicates that it has also baulked at the PSB's call for automated least cost routing.Westpac, which describes the service in its merchant contract as "merchant choice routing", also requires business customers to request the service before it is activated.The revised standard contract also hints at a