Eftpos-owner ePal forced to concede changes to payment system could lead to increased charges

Australia’s most popular debit card payment system has been forced to concede that changes to Eftpos might lead to many retailers facing increases charges.

German supermarket giant Aldi won a court case yesterday in the Federal Court after it complained about comments from Eftpos-owner ePal that consumers would face no extra charges when using their cards in stores when changes start on October 1.

ePal said last month that “Australian consumers should not face new charges following planned changes to eftpos interchange fees”.

The court found statements made by ePal on that topic to be misleading and deceiving and has ordered ePal to make clarifying statements and to pay Aldi’s costs.

Under the changes starting tomorrow small businesses will be charged an interchange fee by banks of five cents for every eftpos transaction valued at more than $15.

That compares with the current fee of 12 cents for transactions made on the international Visa and MasterCard networks via debit cards.

In the past, the consumer’s bank paid a fee to the merchant’s bank.

Exemptions are in place for transactions relating to charities, Medicare Easyclaim and purchases of less than $15.

Peter Strong, executive director of the Council of Small Business of Australia, warns that small business will have to pass on increased charges.

“In retail in particular sales are down so any extra costs are going to have to be added on,” Strong says.

Strong estimates that two-thirds of the transactions at his Canberra book store are done through eftpos and he doesn’t expect the changes to dramatically change that in the future.

He expects that some stores will put up signs to inform customers about the increase while others will add the increase directly onto products.

Strong says it’s unfair that customers of supermarket giants Woolworths and Coles will be exempt from the changes because they are part-owners of ePal alongside banks and credit unions.

ePal says the fee restructure will help it upgrade its system but its rival Tyro says SMEs will bear the brunt of the changes and the carve-out of Woolworths and Coles mean the playing field will not be equal.