The Australasian Association of Convenience Stores (AACS) is calling on the ACCC to consider the anti-competitive impacts that a merger of electronic payments systems would have on convenience stores and other small businesses.
The ACCC has joined other small business advocacy groups to sound alarm bells about reported negotiations between the major banks and payments infrastructure providers that would see a merger of NPP Australia, Eftpos and Bpay.
Jeff Rogut, AACS CEO, says that if the merger were to go ahead it could result in the creation of a single domestic payments provider, diminishing competition and increasing costs for small businesses like convenience stores.
“As a general rule, whenever the major banks have an agenda to merge entities to streamline processes, alarm bells warning of the impacts on competition should sound,” says Rogut.
“Even prior to the pandemic, tap-and-go payment options were increasingly being favoured by consumers. Now, they are overwhelmingly the preferred way for people to make transactions. The proposed merger of payment systems, which provide the infrastructure for these transactions, will have obvious, significant impacts for businesses everywhere.
“But for small businesses like convenience stores, the ramifications could be major. With no competition there is no mechanism for the market to control price and alleviate cost increases for these businesses at this delicate economic time. Nor is there any impetus to improve the level of customer service provided to both merchants and their tap-and-go customers.
“Of course, the other outcome is a further boost in power for the major banks. The discussions around the proposed merger have largely taken place behind the back of small business. We call on the ACCC to recognise the anti-competitive impacts of the merger and prevent it from proceeding.”
AACS recently garnered the support of the Reserve Bank in calling on the Government to require the banks to offer all retailers the option of routing tap-and-go transactions through the least costly payments network.
“We believe it is now time for the Reserve Bank to step up once again and insist that all businesses have the choice to process electronic payments through the network they choose to reduce their costs,” Rogut said.
“This extends to ensuring there’s competition in the market. The consolidation of payment platforms into a single provider will have the opposite – and dangerous – effect.”