Exponential market share gains in online payments processing made by domestic debit scheme Eftpos appear to have induced price responses from Visa and Mastercard.
Australian Payments Plus revealed to Banking Day last month that Eftpos has snared 25 per cent of the card-not-present debit payments market since the launch of its online processing capability in July 2022.
These impressive market gains are likely to have added at least A$30 billion to Eftpos’ total volumes in the last 12 months.
However, the latest official payments data published by the Reserve Bank indicate that international card schemes - Visa and Mastercard – are now trying to stem additional market share losses by reducing costs borne by merchants for online transactions.
According to the RBA there was a significant fall in the average merchant fees collected on card-not-present transactions processed by Visa and Mastercard in the September 2023 quarter.
Card-not-present transactions include payments where consumers pay merchants over the internet, within an app or by communication on a telephone.
The average merchant service fee for card-not present debit transactions processed by Mastercard touched 50 basis points in the June quarter, but the latest RBA data show that it was sliced to 45 basis points in the three months to the end of September.
Merchants paid slightly less when they accepted online payments processed by Visa in the September quarter.
The average merchant service fee for Visa transactions fell to 43 basis points from 47 bps in the June quarter.
The repricing of online transactions by Visa and Mastercard was partly subsidised by higher average fees levied on merchants for accepting debit transactions through point of sale terminals.
Mastercard transactions at point of sale attracted an average fee of 51bps - up 1bp on the June quarter.
Average merchant fees collected on Visa transactions also rose by 1 basis point.
While the RBA did not publish any data for Eftpos’ pricing of online transactions, the Australian-owned scheme remains the cheapest overall provider of debit processing services to retailers.
The RBA data found that the average fee on Eftpos-processed debit transactions across all payment channels was 34 basis points.
The average fee collected on Visa and Mastercard across all channels was 51 basis points.
Australian banks such as NAB and CBA continue to default debit transactions to the global schemes even though they are aware that bypassing Eftpos means that many of their small business customers will bear higher acceptance costs.