CBA has announced new competitive flat rates for all in-store and online payment transactions for eligible merchant customers.
It will offer 1.1 per cent for all in-store card transactions and 1.5 per cent for online transactions, regardless of the interchange rate or the type of card (debit, credit or Amex).
“Under our new arrangements, small businesses will pay a new simple rate that we believe will be the lowest in the market, at this point in time,” CBA CEO Matt Comyn told a House of Representatives economics committee hearing on the four big banks yesterday.
“The rate will be independent of routing and easily compared with those of competitors. This new approach will be both significantly lower cost and simpler than our offerings to date, and we will manage the transfer of customers on their behalf.”
Comyn noted that CBA wrote to 80,000 merchant customers last year to promote the benefits of lower cost routing (LCR).
“The approach we offered was not widely taken up. Customers told us they wanted us to manage the complexity involved in delivering these savings.”
CBA’s executive general manager, Everyday Business Banking, James Fowle, says: “The overwhelming feedback from our small business customers is that they want simple competitive pricing without the hassle. They want the benefit from least cost routing without having to manage the routing themselves.
“Our new flat rates are designed to offer that by removing complex pricing structures and managing the routing of transactions for them. We’ll automatically and centrally route transactions in the most cost-effective and competitive way, saving businesses a lot of time and money.”
Simplifying the process even more, this low-cost rate will become the default and eligible small businesses – those with a turnover equal or less than $250,000 – will automatically receive the reduced single rate from October 2021 onwards with no need to “opt in” or apply.
“We’re taking the guesswork out of it for small businesses who don’t have the time to individually assess and compare the costs associated with different schemes. The flat rates also provide our customers with an easy way to recover their costs through surcharging at a single rate,” says Fowle.
He adds: “From next week, we’ll be letting more than 50,000 customers know we are automatically waiving their standard merchant fees for three months from September through to November. This translates into approximately $7million back into their pockets leading up to Christmas.”